Insights
May 19, 2020
For decades managers were taught the iron-clad rule that successful brands excel on two of three potential customer benefits that include product, service and price/value.Excellence in these areas meant delivering high quality products, having outstanding customer service and providing a compelling value for the price.
Economic reality dictated that it was impossible to excel on all three of these critical customer benefits at once. Instead, winning in the market meant every brand had to distinguish itself on two of these customer benefits and, at a minimum, be acceptable on the third. If a competitor already owned two of these customer benefits in your market, we were taught to focus on segments of customers who prioritized the missing benefit.
Today, this rule has been disrupted, like so much of the conventional wisdom across industries.Now it is not only possible to excel on all three dimensions of product, service and price/value, but it is expected.Amazon is generally considered the first to break the traditional paradigm by offering a nearly endless array of high-quality, name brand products at great values with service levels that can deliver most products within 24 hours and many in as few as two hours.By delivering on all three customer benefits in a way that had not been thought possible before, Amazon has created a new set of expectations among customers, an expectation to “have it all”.While much of what Amazon has achieved can’t be replicated by other companies given Amazon’s scale, first-mover advantages and financial/tax advantages, it does set new expectations among customers and there is a way to win without attempting to “out-Amazon” Amazon.
Our experience has shown that brands that start from a deep understanding of the drivers of their customers’ passions and then use that to inform everything they do create powerful competitive advantages including to product, service and price/value benefits.In many cases, that understanding of customers begins with a founder who shares their passion and can translate those insights into an offer and a brand that wins.We also know that a visionary founder is not a requirement for success.Any brand can tap into its customers’ passions in order to forge deeper relationships among the committed fans that drive ongoing loyalty and advocacy.More than just a mission statement or a copy strategy for advertising, successful brands make their customers’ passion the very soul of their brands and this guides everything their brands do and say.Examples of brands/businesses that have made this passion the soul of their brand can be found across industries from home cleaning to cycling to specialty retail and beyond.
Like millions of people, my niece is a huge fan of Mrs. Meyer’s Clean Day. The fact that these products use no harsh chemicals and still get all of her toughest cleaning jobs done makes the brand a great value to her despite the price premium over traditional cleaning products. Not surprisingly, Mrs. Meyer’s products connect with many issues that my niece and other like-minded people are passionate about. In fact, the brand was founded precisely to provide an alternative to traditional cleaners based on harsh chemicals and to create a more sustainable approach to the home cleaning products category. To live up to this promise, Mrs. Meyer’s products use plant-derived ingredients that are, as much as possible, farmed sustainably. Packaging is minimized and recyclable with an emphasis on reusable spray nozzles and refill packs. Each product has wonderful floral and herbal scents to choose from that help freshen the entire house. Most importantly, the products really work on even the toughest cleaning jobs and yet they are entirely safe to use regularly.
A typical user review for Mrs. Meyer’s rates the product at a full five stars. Comments often espouse the type of advocacy and enthusiasm that only the converted can provide. Many reviews discuss the initial skepticism consumers had about the efficacy of cleaning products that use only plant-based ingredients rather than traditional cleaning chemicals. They then discuss the epiphany they had in using the product, how enjoyable the experience was and how much better they feel because they made the switch to cleaners that won’t harm their family or the planet. In the rare reviews that are less than five stars, the most common drawback cited regards the product fragrance. Some find the scents to be too powerful while others purchased a specific scent (lavender, geranium) that they or someone in their household disliked.
Mrs. Meyer’s provides a stark alternative to traditional cleaning products while connecting to its consumers’ passion for their families, for maintaining a clean, healthy home and for the planet. The true converts like my niece have Mrs. Meyer’s products throughout their homes; the dish soap by the kitchen sink, the scented candle in the living room, the hand soap on the bathroom sink and all of the cleaning and laundry products stored in cupboards and closets. By understanding its consumers’ passions and using this as the soul of the brand, Mrs. Meyer’s has gone from an idea its founder had in 1999, to a limited set of products available at a few niche retailers, to a comprehensive line of products that is a juggernaut today.
I am not a cycling enthusiast and I don’t know much about the sport beyond occasionally tuning into coverage of the Tour de France. So, when Walmart’s owners, the Walton family, purchased a majority stake in the London-based cycling brand, Rapha, about two years ago I took notice. I wondered what would compel the owners of the world’s largest retailer and the team of sophisticated money managers in their family office to buy a controlling interest in a cycling brand I had never heard of before. Once I started learning about Rapha, its unique approach and its incredibly devoted fans, I realized exactly why the brand is so attractive as an investment and, while I only get on my bike for fun and not for training, I have been a fan of Rapha ever since.
Founded in 2004, Rapha is a perfect example of a product and an experience-based brand with a truly symbiotic relationship. Focused on cycling enthusiasts, Rapha creates stylish, premium priced products sold through their direct-to-consumer (DTC) model. What really distinguishes Rapha, however, is their maniacal focus on creating exceptional rider experiences for their community that are centered around the Rapha Cycling Club (RCC). With over 13,000 members around the world, the brand offers riding events, tour packages featuring world-renowned cycling routes, and inspiring content. Instead of having traditional retail stores Rapha operates “clubhouses” that are community gathering places for members that also provide refreshments and, yes, Rapha merchandise for purchase.
In a November 2019 interview by Subscrybe, Rapha Founder, Simon Mottram, captures the brand ethos as follows:
“[Rapha] does not focus on the economy, but instead on the members. The company’s mantra is ”putting the customer at the center of everything we do”…But not everyone can become a member of RCC.In fact, Rapha has set a minimum limit for all of their Rides, which means that only “true” cycling enthusiasts can join the club. Moreover, there is a set of rules for RCC members – you need to (preferably) wear RCC cycling clothes and there is a special etiquette concerning greeting other riders on the road, waiting for those who are trailing behind, and helping those in need.”
This very selective approach by Rapha in defining their core customer, perhaps, is the secret ingredient that puts their ability to create experiences that truly resonate and drive loyalty in high gear. What is certain is that few businesses have made the passion of their customer base the heart and soul of their brand to the degree Rapha has. And, few brands have enjoyed the level of growth and success Rapha has achieved.
Like many retailers, Tractor Supply Company strives to put its customers at the heart of its business. But perhaps no other retailer is as integral to the lifestyle their customers hold so dear as Tractor Supply is for its mostly ex-urban, rural customers who include the kind of recreational farmers and ranchers who generally don’t make a living from farming but who helped drive an estimated 400% increase in raising chickens in the backyard from 2017 to 2019, according to a USDA estimate. As a result, while many other retailers have struggled, Tractor Supply has thrived and has grown from a tiny mail-order business selling tractor parts in 1938 to generating more than $8 billion in sales today from a network of over 1,800 physical stores and its online site.
Tractor Supply’s passionately loyal customers view the retailer as more than just a store. To them Tractor Supply is an important member of their community, which stems in large part from Tractor Supply’s unique culture of service. The team members at Tractor Supply’s stores go beyond just knowing their customers by name, they strive to always be there for customers, especially when customers need them most. Whether that means opening the store early or staying late to help care for a sick animal, providing expert advice to get the most from your heirloom tomatoes or having everything you need to take the sting out of beekeeping. That’s why Tractor Supply offers nearly 20,000 products in their stores and 125,000 online that are purposefully selected to meet the needs of their customers (my favorite: you can buy live chicks, ducklings and turkey chicks online to be shipped to you); and, of course, their legendary top-notch customer service
Every business talks about putting its customers first, but any business that wants to truly understand how to make its customers the soul of their brand should study Tractor Supply. As the largest rural lifestyle retailer in the United States, Tractor Supply is famous for being there whenever their customers need help, for sharing expert knowledge and for having the right products to live the rural lifestyle they value. By being loyal to its customers when they need them most, Tractor Supply has earned the loyalty of its passionate customer base for over eighty years.
What these brands and businesses have in common is the passion they have tapped into that moves their customers’ buying decisions to a higher level. By recognizing and reflecting their customers’ key passion points, these brands/businesses feel like kindred souls to their fans, not just products and services. That connection drives the kind of loyalty that captures most, if not all, of those customers’ spend in the category over many years. In addition, that kind of passion can often command a significant price premium and still be considered a compelling value. And, these customers are often brand advocates who share their passion for the brand with others by recommending the brand and posting glowing reviews.
The new question to managers is not simply which two customer benefits your brand should focus on in order to win, but what is the soul of your brand? We’ve found that the starting point for answering this question is to understand your most valuable customers at a much deeper level. What are they passionate about? How do some of their passions touch your brand in meaningful ways that are authentic and unforced? As we’ve seen from Mrs. Meyer’s success, your brand doesn’t have to offer its own carefully curated retail experience or cycling tours to align with something or even several things your customers are passionate about.
Even so, too many managers give up on this question before they’ve even begun exploring it. For them the thinking seems to be that people, including their customers, are only passionate about “big things” like their families and friends, important social causes or their favorite interests and hobbies, not “little things” like their brands or businesses. Today’s challenge is to identify authentic connections between those consumer “passion points” and the soul of your brand. Perhaps the biggest challenge is ensuring that those connections are real, not forced and not artificial.
Other managers throw in the towel because they think brands can only achieve this type of success when a visionary founder with infallible gut instincts is guiding the business. The truth is that any brand can identify and benefit from these connections. In fact, we’ve helped dozens of brands from paper plates and consumer electronics to hot dogs and office products make and benefit from these connections. At the outset, each of these brands was considered an undifferentiated commodity. But, each of them found new purpose and success by reexamining the soul of their brand – what really makes the brand special – and then connecting that to a passion shared by their consumers.
Start with your most valuable consumers and the things that matter most to them. It is important, however, to look broadly at this question and not limit your assessment to issues that are specific to the product or the category. For example, brands like Amazon, Netflix and Uber, while competing in different categories, have re-set consumers’ expectations around “time” with their same-day delivery, on-demand streaming, and real-time tracking of rides. How will new expectations regarding time, and potentially other new expectations redefined by players beyond your category, impact your brand?
Then examine what your brand stands for today as well as the brand’s heritage leading up to today and what it could potentially stand for tomorrow. The common ground between what matters to consumers and what your brand does, did in the past, or could stand for are the potential areas to examine further to identify the most meaningful, most authentic connections.
Here's how this played out with the paper plate brand we worked with. They had been dragged into price-based competition with private label store brands offering foam “penny plates” for many years. To compete, they had pulled back on brand building and communications in order to lower prices. In fact, the brand’s soul, which is rooted in caring for family, would turn out to be one of its greatest strengths. The brand made a powerful connection with its core consumers who were looking to make clean up after meals fast so they could spend more time with their families during and after meals. The brand was uniquely suited to make this connection and it pursued innovation, messaging and packaging initiatives that helped it own that space in ways that were true to, and unique to, its soul. The result was double-digit growth for both revenues and profits among an increasingly loyal customer base.
While thinking about the soul of your brand might seem like an esoteric exercise, we believe that this concept will become more important in the post Covid19 pandemic world. This pandemic is going to materially impact consumers’ attitudes and behaviors in ways that are hard to predict at present. However, it is our thesis that all of us will be more appreciative of what matters most in our lives and that as consumers we will become more selective and discerning in what we buy and the brands we support. Brands that have identified and communicated their “soulfulness” in connecting with their customers have always enjoyed significant advantages, and those advantages will only increase going forward.
About the authors
Chris Shimojima is the Founder of C5 Advisory, a management consultancy focused on helping companies find new paths for growth in today’s digitally driven marketplace. He serves currently on the Board of Directors of Kirkland’s, Implus Corporation and Milani Cosmetics. Mr. Shimojima served as Chief Executive Officer of Provide Commerce, Inc., a floral and gifting e-commerce retailer that was acquired by FTD Companies, Inc. in 2015. From November 2006 to March 2012, he served as the Vice President of Global E-Commerce at Nike, Inc. After starting his professional journey in consumer packaged goods, he evolved his career into digital commerce in 1999 as the CMO for kozmo.com. Since then he has been on the forefront of digital experience innovations. Mr. Shimojima is based in San Diego.
Jason Green is a Senior Partner with The Cambridge Group. He has 30 years of combined consulting and marketing experience working with clients across industries. He is the lead author of Optimizing Growth and is a contributing author to several other books and numerous articles on growth strategy.
Contact
