Corporate earnings this season are particularly unique. A global recession, the war in Ukraine, and a virus that is still disrupting normal life are among the many factors affecting businesses small and large, resulting in the first quarterly earnings decline since the onset of the COVID-19 pandemic. 

Leaders are navigating difficult waters as they are tasked with facing the swirl of the macro-economic environment, moving forward from layoffs and identifying new growth opportunities — all whilst budgets are being slashed across industries. Despite this, there are many positive signals stemming from the recent earnings as many leaders are optimistic about a return to normalcy in 2023. 

Prophet looked at close to 100 quarterly earnings results, across varying global industries and sectors, to understand the key drivers of growth, headwinds facing leaders and strategies to move forward in 2023. Here are our learnings on what earnings season could mean as we try to regain balance, agility and growth acceleration in arguably the least predictable time in recent history. 

Top Learnings From This Remarkable Earnings Season

1. No industry or organization was shielded from the impact of a sour macroeconomic and geopolitical environment, with many reactively cutting costs to preserve margins. 

This is a lackluster earnings cycle for most, with “headwinds” as the key buzzword and an average -22% earnings-per-share decline from Q4 2021. In 2022, businesses optimized for pandemic-fueled growth were forced to adjust to a down-market driven by global inflation, foreign exchange fluctuations, COVID lockdowns in China and additional supply chain disruptions.  

As a result, leaders became laser-focused on cutting costs, managing risk and re-evaluating their business model. Banks, for example, are stowing away billions of dollars to protect against rising loan defaults; Harris Simmons, chief executive officer at Zion Bancorporation commented, “We continued to build our loss reserves due to both continued loan growth and the prospect of a slowing or recessionary economic environment in coming months.” Investors are bullish that inflation will slow in 2023, but businesses are managing risk and going lean to prepare for continued pressure. 

2. Despite a harrowing cry that “2023 will be a year of optimization and efficiency”, businesses are sharply committed to returning to growth in 2023. 

While headlines have focused on streamlining costs, the real takeaway from this earnings cycle is what leaders are laser-focused on: improving top-line growth. Many executives highlighted strategies to remain relevant and stay ahead of the competition, such as improving product quality, bringing new offerings to market and investing in customer experience. 

Consumer packaged goods are one of the many industries where executives are investing more in sales and marketing tactics to improve competitive positioning, enhance product superiority, and ensure price increases stick. For example, Mike Hsu, chief executive officer at Kimberly-Clark attributed organic growth in the quarter to “improving our product offering and market positions,” and plans to increase the investment in advertising to “grow the category for the long term”. 

Those who have already been executing these strategies saw unprecedented levels of revenue and customer growth in 2022 — even in a recessionary environment. In fact, Prophet found an 8% average year-over-year growth in revenue for the quarter that ended in December 2022. 

3. Executives are using this downturn as an impetus for transforming their business and reinventing their brand. 

The data is in. Similar to what we saw coming out of the COVID-19 downturn, executives across industries are moving from reactive adaptation to proactive transformation. 2023 has become a fertile breeding ground for brands seeking to drive sustainable, purposeful, and transformative growth. Noel Wallace, chief executive officer at Colgate-Palmolive described how they are betting big on digital transformation as they have now “shifted [their] resources to deliver more breakthrough and transformational innovation” and are confident that, “despite macroeconomic conditions worldwide, we are executing against the right strategy and are well-positioned to deliver sustainable, profitable growth in 2023 and beyond.”  

In healthcare, Eli Lilly & Company is calling 2023 an “inflection point” and “a chance to expand our impact on patients and growth potential as an R&D-driven biopharma company,” and in tech, Amazon is “working really hard to streamline our costs [without] giving up on the long-term strategic investments that we believe can change Amazon over the long term.” While budgets are being slashed, executives are exceptionally clear on the need to preserve investments in firm-wide transformation. 

4. Commitments to environmental, social and governance (ESG) strategies are even more paramount in 2023. 

Pandemic-born ESG strategies were reinforced this earnings season despite a tough macroeconomic climate. Many leaders dedicated time to showing investors how they are measuring up on ESG metrics, such as decarbonization, and activating their investments in the market through new products, solutions and partnerships.  

This is especially relevant given the heightened investment from governments and the private sector in decarbonization, which has the potential to catalyze a mini-boom cycle in the “green” economy. To that end, the industrial sector was particularly vocal on the need to meet “growing customer demand for innovative and more sustainable solutions” (Dow) and “accelerate our transition to a low carbon green economy” (Trane Technologies.) It is clear that economic distress is not enough to dissuade businesses from the imperative of implementing an ESG strategy, especially as consumers are ever more watchful. 

5. People and teams are imperative to the 2023 turnaround as leaders articulated the importance of building a strong employer brand. 

Layoffs are an unfortunate outcome when growth reverses, such as when the pandemic growth bubble popped in 2022. However, executives are now focusing on the path forward as they highlighted strategies to strengthen their core business, better align operating models to their go-to-market strategy and empower remaining employees. Donald Macpherson, chief executive officer at Grainger commented on the need to “strengthen our purpose-driven culture by ensuring Grainger is a place where our team members can be their true selves and have a fulfilling career”, while Bill Rogers, chief executive officer at Truist pointed to leveraging “our increased capacity, expanded capabilities and talented teammates to actualize our purpose.” 

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Great leadership and great communication go hand in hand. Just look at the greats—from Martin Luther King Jr. to Winston Churchill, Nelson Mandela to Ruth Bader Ginsberg. Leaders who respect language as a force for change have transformed cultures, systems and policies. 

But how exactly do impactful leaders approach language to initiate such meaningful change? And how can leaders communicate to guide their organizations to success?  

Right now, we find ourselves in a reality that’s both ripe for change and steeped in the minutiae of the moment — where every word can be recorded, shared, scrutinized and misconstrued. For that reason, thoughtful and intentional communication from leaders is more important than ever before.  

To Guide Meaningful Change, Leaders Must Communicate with Purpose  

Organizations are changing at a deeper, structural level in response to the storm of urgent external forces like systemic inequality, climate change, the COVID-19 pandemic, the mental health crisis and the shift to hybrid working – with many having to respond to a number of these factors all at once. The result? A huge emphasis on organizational culture and change at a rapid pace.   

But we can’t talk about organizational culture transformation without talking about language. Language is one of the most powerful tools for inspiring focused action and influencing culture.   

The Anatomy of Effective Language  

The role of language is to connect—and intentionality is essential to connect effectively. When Aristotle spoke about language in his theory of language and meaning, he defined three ways to effectively connect with another individual or team: to open their mind through reason (logos), to open their heart with emotion and vulnerability (pathos) and to find common ground through a shared truth or values (ethos). Through these elements of language, leaders can connect, persuade and build trust more effectively.    

Language is a system that defines and pervades all other organizational systems and it’s both fueled and forged by your culture. It only makes sense then, that when your organization evolves, language must evolve along with it.   

Approaching Language During Transformation   

With companies going digital, organizational communication has a host of new challenges. How do you pick up the vibe on a Zoom call? How do you make one-on-one calls feel as natural and spontaneous as passing a colleague in the hall? It’s hard work, which is why so many leaders are eager to bring people back to the workplace. While it’s tempting to cling to the systems that have kept our workplace cultures humming for decades, we have been jettisoned into a hybrid, hyper-speed era—one that demands more dynamic, adaptable cultures. Language acts as both the cultural catalyst and the glue holding an organizational culture together.   

At Prophet, we think of the organization as a macrocosm of an individual. Like an individual, an organization has DNA, a Mind, Body and Soul — and when we are looking to effect transformation, it has to be human-centered across all these elements. Why? Because businesses don’t change. Humans change and then they change the business.  

Let’s look more closely at these four areas and the role that language plays:   

• DNA: How an organization defines their shared vision, values, purpose and ambition  
• Mind: Enabling the workforce to adopt new skills and drive change   
• Body: Language helps teams understand the systems needed to direct their transformation   
• Soul: Motivating employees and other stakeholders to contribute to the change  

By thinking about language through the lens of Prophet’s Human-Centered Transformation Model, leaders can more effectively communicate throughout the transformation process.   

DNA | Defining the Change   

Language literally builds an organization’s DNA. That’s why crafting the DNA involves a careful thought-through, strategic, iterative process that captures data-driven insights and diverse perspectives from across the organization. The idea is to define and then express the new ethos in an authentic way.   

Recently, we worked with Thrivent, a major U.S. financial services organization, to transform its business and brand. Thrivent wanted to innovate its offerings and expand its reach to new markets while maintaining its loyal membership base and values.  

Defining the ambition with a team of data scientists, strategists and writers allowed for the team to take a more critical lens to the language used in the DNA of the organization. From this work, we defined a shared purpose that reflected Thrivent’s heritage and enabled everyone to align with the modern organization it was ready to become: Thrive with Purpose.  

We like to think of leaders as the carriers of this DNA, modeling shared values and purpose in both their words and actions, so we worked with Thrivent’s senior leaders and managers to create a launch video that introduced the new ambition and shared purpose to the whole organization. From there, we helped them roll out the new strategy, consulting on their communications and providing exact language — including a new brand voice and messaging — so managers and senior leaders could confidently share the new ambition and brand with their teams. Together, our work received the 2020 Transform award for tone of voice.  

Body | Directing the Change   

Embodying and directing any change requires a clear roadmap and reliable systems that give the DNA a place to materialize. We use language to set and measure clear goals and achieve them together (i.e., KPIs). Word choice in KPI development is critical because they must be clear, tangible, and directional.  

To develop these KPIs leaders should ensure they should:   

1. Ladder up to one of two key business drivers  
2. Be linked to the ambition and meaningful milestone on a roadmap  
3. Be aligned at a business or functional level before translating into team or individual goals   
4. Be shared and transparent  

Talent and performance development is a great example of this. A while back, we worked with a newly formed but significant global bio-pharmaceutical player with an ambition to create a more decisive, agile and performance-driven culture. To achieve this, the organization wanted to take a fresh approach to recognizing employee performance — including how it rewarded individuals and teams that truly made a difference.  

So, we set out to first clarify what “good” performance looked like. Then, we translated that new definition into a purpose-driven method of goal setting and performance conversations. We helped its team choose language more thoughtfully, which enabled managers to respond to this shifting performance criteria by having the right conversations.   

Mind | Enabling the Change   

To enable change, leaders must appeal to people through reason (logos) to help them adapt to the new set of values (ethos). If employees are clear on their roles and know exactly how to upskill to align with the ambition, you can establish capabilities built on trust and progress.   

For Thrivent, activating the new DNA proved challenging for their financial professionals because they run their own businesses around their personal philosophies. So, we found common ground, showing the connection between their values and the new brand purpose, promise and principles.   

Then we gave their professionals the tools — scripts, talking points, and educational resources that gave them the language to bring the brand DNA to life in their daily work. We also recorded interviews with them where they shared their financial philosophy through the language of the new brand promise. This helped them co-create accessible, on-brand language to share with clients.   

Soul | Motivating the Change   

The most enduring and dangerous myth about leadership is that you must have all the answers — and if you don’t have them, pretend you do. A leader who can admit when they don’t have all the answers gains trust. And when combined with that trust, a leader who makes space for employees to be seen, heard and understood helps to take people on a change journey.   

For a culture to flourish through a transformation, it’s vital for leaders across an organization to reinforce shared values, celebrate wins and share learnings as often as possible. In the Human-Centered Transformation Model, we call this Soul. By motivating small wins throughout the organization transformation journey, employees feel recognized for their efforts and connected to something bigger than themselves.   

In addition to a regular and genuine celebration of small successes and learning moments, the single most powerful way a leader can motivate change is by showing vulnerability.  

When the pandemic hit, Prophet was among many organizations that closed the offices. We prepared to close for two weeks and were instructed to work from home. Those two weeks stretched to nearly two years. During this time, our CEO Michael Dunn, along with the Exco team, created a Global Pulse call, a bi-weekly check-in that connects all the firm for 45 minutes to meditate, share stories, talk about recent events and be “together”. While the Global Pulse calls were a direct response to the missing connections we had in the office, they have created a ritual that has given us all a sense of unity as well as opportunities to make space for the difficult experiences we were and are all facing.  

Michael Dunn starts every Global Pulse call with a guided meditation—a simple and gracious use of language that, over time, introduced new behaviors and cultural norms to the firm. To experience a guided meditation on that scale with fellow colleagues spoke directly to hearts and minds, and for many, became a ritual we relied on.  

“The single most powerful way a leader can motivate change is by showing vulnerability.”

What is also subtly powerful about this ritual is the name: Global Pulse. Alone these words are impactful, but together even more so. The invitation to “check the pulse” of our global culture serves as a warm reminder that our culture is a living, evolving aspect of our co-existence — and it influences all we do. 

We spoke with Michael about his reflections on the Global Pulse and use of language over the past 18 months. He noted, “For the first few months, and even up until now, I feel so much pressure to get the tone and experience just right. But I started to see that using the mindfulness exercise to open the forum, which I do along with everyone else who participates, helped create space for me to feel more present, more connected, more curious and more vulnerable, which then rippled across the globe for everyone who was participating. It helped to elevate the experience for everyone as we invited teams to offer gratitude, spotlight work or have hard conversations about the world around us and Prophet’s way forward.”  

The Global Pulse gave the firm both the space and the language to connect and speak on behalf of our needs. Some pulse calls are filled with photo sharing and stories about working from home. Others are set aside for difficult conversations or empathizing with those who are grieving. We had agendas, but oftentimes we led with our hearts. Because sometimes intentional language doesn’t always require polish. It can simply be about admitting what you don’t know, what you dare to believe and what you need.   

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In the Outliers podcast, Michael Dunn shares his journey and some examples of our firm’s work.

Listen here to learn the amazing story of Prophet including our unique culture and transformative client work.

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In the spring of 2000, I was approached by a colleague and friend to consider doing some pro-bono work for a small nonprofit with a critical strategy project. I was caught off guard. Our company, relaunched as Prophet Brand in 1999, was in the middle of its first growth surge, powered by David Aaker’s global brand guru status and the Dot.com investment boom. As a young, fast-growing firm, we were having a hard time establishing our culture, growing our team, defining our methodologies and driving high-quality work for paying clients. I struggled to envision how we would be able to free up the time and resources to also do high-quality work for pro-bono clients. My mid-30’s CEO mindset sensed that this was a luxury we couldn’t afford. Luckily for me, this Prophet colleague – Cathy Halligan – didn’t give up. She was determined to help me see why doing this kind of work was consistent with our aspiration as a firm and my hopes as a leader.

The nonprofit organization had a passionate leadership team that enabled some of the only visible wins for its movement in the United States. But, it found itself at a crossroads. Its talented executive director, team and board needed to figure out how to capitalize on its strengths and build a story that would help power the organization and its resources to more transformational impact. As Cathy Halligan consistently argued, Prophet circa 2000 had exactly the right mix of expertise and perspective to help solve this problem. If we weren’t ready to generously apply our time and talents to helping change leaders answer their hardest brand and narrative questions, what were we here for?

Her persuasive words and spirit have stayed with me to this day. Cathy’s determined efforts led us to shape our first pro-bono project in the fall of 2000 with The Lambda Legal Defense and Education Fund. It was the first of what’s become a series of Prophet pro-bono efforts to support a range of US organizations committed to advancing LGBTQ+ civil rights in the United States and globally.

Starting Our Work With LGBTQ+ Civil Rights

It may be hard to remember the state of the LGBTQ+ civil rights movement at the turn of the century. Bill Clinton had signed the Defense of Marriage Act into law in 1996, stating that marriage could only be between one man and one woman. At the state level, many anti-LGBTQ+ laws and ballot measures were getting passed left, right and center. Also, the AIDS crisis was still roiling the broader LGBTQ+ community. Times felt dark.

The single bright spot of progress was in the courts, where courageous citizens and their lawyers were bringing legal challenges to some of the most oppressive anti-LGBT laws. Lambda Legal and some of its allies were the driving forces behind this strategy. They would identify the most egregious laws that allowed for discrimination in employment, housing, healthcare, education, etc., or that still criminalized consensual LGBTQ+ relationship behavior between consenting adults, find plaintiffs who would sue the government asserting that these laws were unconstitutional, and then provide the plaintiffs with all the legal support needed to execute the cases. Through this strategy, Lambda Legal helped win the first HIV/AIDS discrimination case in the 1980s, won a historical legal precedent holding schools accountable for harassment and violence against LGBTQ+ students in the 1990s and achieved broad progress on so many other legal battlefields.

But the organization was made up of lawyers using lawyer-speak in all their communications, was chronically under-funded and was not well-known or understood even within the LGBTQ+ community, let alone the broader public. Our job was to help them land on an aspirational purpose, brand strategy, narrative and roadmap that would help elevate its impact, enable transformative change, dramatically increase its donor base and elevate its reputation among the broader movement.

We unlocked a critical insight – most people didn’t understand how the outcomes of Lambda’s work would impact the everyday lives of LGBTQ+ people, families and communities. We needed to help them turn their legal strategies into human stories told through the faces and voices of those directly affected. We needed to help them develop a storyline that up-leveled the context of their work – to help people understand how making progress through the courts was an essential building block to advance the movement’s broader civil rights agenda. The selected strategy created a second major plank for the organization – a commitment to investing in dialogue-shaping education, as well as precedent-setting litigation in the pursuit of social justice. The way in which it was embraced and executed fundamentally changed the character and trajectory of Lambda Legal, elevating its influence, dramatically increasing its fundraising prowess and growing its capacity and resources to drive transformative change.

Adding on to the Movement

Later that decade, we found another organization in the LGBTQ+ movement – Equality California –  a trailblazer with charismatic leadership and an excellent track record of advancing the most comprehensive set LGBTQ+ legal protections passed by elected officials and politicians anywhere in the United States. Prophet aligned itself to support Equality California when the organization and the movement were at an incredibly low point. Many were blaming the organization for losing the “No on Prop 8” anti-gay marriage California ballot initiative in the 2008 election, in effect ripping away hard-earned marriage rights and putting the legal status of 18,000 same-sex marriages from the previous 4 months in limbo.

Equality California had to learn to acknowledge the mistakes with grace and humility while finding a new way forward. We dug deep to unlock a new set of insights across an array of stakeholders and learned that there was an opportunity to reposition the organization as a champion for full equality for LGBTQ+ Californians, not just same-sex marriage. Getting legal rights was not enough if it didn’t lead to a pervasive change in the “lived” experiences of LGBTQ+ citizens across all dimensions of their lives. And that marriage, while important, was only one of the vital steps in this path to full “lived’ equality.

This kicked off what turned out to be a 10-year plus relationship with leadership at Equality California. Over the course of our partnership, we found many ways to support its leaders and its mission. For example, we helped provide detailed insights work to understand how to shift perceptions of potential allies and voters as LGBTQ+ civil rights were tested through ballot propositions. We also helped with donor growth strategies and volunteer mobilization campaigns.

In 2017 and 2018, we helped the next generation of leaders unlock a new purpose and story for Equality California after the marriage question had been settled. What should “full and lasting” equality look like? There were still dramatic disparities in the health and wellbeing of the community and continuous attacks on the gains that had been achieved. How could Equality California become a movement builder, intersectional and inclusive in nature, and fit for a new era of digital activism, grassroots energy and urgent necessity? We helped them answer these questions, and then retooled the brand along with its look and feel to reflect the new strategy. “Until the work is done” became the phrase that captured the spirit and the intention of this team.

Celebrating 20 Years of Giving Back

While these stories spotlight the bookends of 20 years’ worth of pro-bono energy and commitment to this movement, there have been many other organizations and themes that Prophet teams have touched along the way. We’ve rebranded a groundbreaking leader in its drive to create safe, respectful and healthy K-12 schools for LGBTQ+ students, helped to enrich stories for teams working to redefine LGBTQ+ images in the media and supported leaders tackling the tough issue of LGBTQ+ youth suicide rates and homelessness. No matter what the organization or the issues, committed Propheteers stepped up to the table with energy, expertise, humility and compassion to deconstruct thorny questions, unlock new insights and co-create positive strategies, programs, identities and narratives to move the work forward.

As we launch the next chapter of Prophet Impact, with three focus areas – equality, social mobility and sustainability – my hope is that we can build upon our journey within the LGBTQ+ movement, and the organizations and grassroots advocates who power it. Prophet has grown in scope and scale now, with a deeper set of capabilities to support bold organizations aspiring to drive transformative change. Our experience has taught us that it is only with sustained effort that we can hope to support these movements and organizations in our shared desire to drive enduring, meaningful change. And that we must be prepared to continue to invest, even in the face of demoralizing setbacks, fierce resistance and uneven progress.

I am grateful for Cathy Halligan’s persistence more than 20 years ago, and for all the energy that so many creative, strategic, committed teammates have put into this body of work over the years. So much effort and so much heart have been poured into our collaboration with these trailblazing organizations. Our talents elevate the impact of organizations and movements on the ground. We see firsthand the struggles and challenges these movements face in their efforts to drive systemic change. But rather than feel daunted by these realities, we bring even more determination and optimistic energy to the work at hand. We’re enriched and strengthened as professionals and humans through our shared work together – we get way more than we give.

“No matter what the organization or the issues, committed Propheteers stepped up to the table with energy, expertise, humility and compassion to deconstruct thorny questions, unlock new insights and co-create positive strategies, programs, identities and narratives to move the work forward.”

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We strive to be an indispensable ally to our clients in their growth journeys, leaders who aspire to build brands, transform businesses and move society. This year has challenged us, as never before, to bring that purpose to life in new and innovative ways.

Many of our clients and employees came of age when the best solutions simply meant more sales and a stronger bottom line. Anything that increased a company’s return to shareholders counted as excellence. While the move to purpose-led growth and multi-stakeholder capitalism had already begun shifting businesses away from that narrow vein of thinking, the past year blew it up entirely.

What Does it Look Like to Have Prophet as Your Growth Partner?

Prophet draws on expertise around the world, with 600+ employees in 15 offices. And we work with a single global P&L that enables us to put a just-the-right expert in each client situation, whether our teammate is based in Austin, Hong Kong or Berlin.

From the ground up, we built Prophet to be your growth partner, driving high-impact digital transformation.

And all this consistently has helped us form enduring bonds with our clients. As Dr. Michael K. Stern, President and Chief Operating Officer, Climate at Monsanto, put it: “The Prophet team integrates themselves with the client – they felt like a part of the team and were completely aligned with what [the team] was trying to do.”

Our clients tell us we are responsive, supportive and thorough—a trusted extension of their teams.

These long-term relationships come from closely partnering with our clients, side-by-side, especially when the right path is the riskier one. Our Propheteers carefully cultivate these connections, blending creativity, data and technology in new ways to help our clients meet their growth goals.

Today, we know that is not enough.

Creating Enduring Bonds with Our Clients & Teams

“Indispensable” doesn’t mean the same thing it did a year ago and setting effective growth agendas can’t be the only goal. We build relevance–the kind that can only come from genuine purpose and empathy. That means we stand for companies that stand for something–and we’re here to push, prod and lead our clients to these new avenues of opportunity. What doors are opening in this changing environment? And how can we help clients find these purpose-driven transformations, nourished by digital and organizational change?

Our People Lead the Charge

This year, our unique team of thinkers, doers and makers increasingly challenged each other to share their entire perspective, including what it means to be gay, Black, immigrant or female. Those identities have always been there. But as we learn to be better allies to each other, the entirety of employees’ experience is helping us think more broadly and feel more deeply. We’re learning to be more empathic, compassionate and open-minded. Unsurprisingly, that’s allowing us to create even better solutions.

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Our values vibrate throughout our organization. We see this in the way our teams support one another and the way we show up for clients. We are fiercely committed to offering quality solutions to challenging business problems while holding on tight to our humanity in the process. Clients often note Propheteers’ ability to deliver high-quality thinking and solutions, without compromising their best selves. It is the depth with which people embrace, build upon and live our values, that has led Prophet to be honored with a ‘Best Firm to Work For’ award by Consulting Magazine.

Given this honor, I wanted to take the time to reflect on this past year – a whirlwind of a year like none other.

We’re all continuing to adapt to these challenging times – both in the consulting industry and in our personal lives.  What’s most fascinating is the crossover between the work we are doing internally to keep Prophet’s business moving forward and the ways we are supporting and guiding our clients. At the beginning of the pandemic, Prophet took swift, empathetic actions to address the sudden changes in the market. As we uncovered solutions that worked for our business, we’ve been able to share ideas to help our clients find their footing at the same time.

Along the way, we’ve learned that no one can eliminate risks. But if we can find ways to be empathetic, transparent and supportive as we navigate this context together, we can strengthen our bonds, elevate our sense of community and feed off of each other’s energy to unlock the strength we need now and in the days ahead.  By focusing on our people and our relationships with clients, we became more comfortable leaning on one another and navigating this together. We became more confident in our intentions and our commitment to moving forward.

Maintaining morale by putting our people & culture first

Morale has remained remarkably strong. We’ve truly seen a collective spirit of resilience. This “fearlessness” – one of our company values – has always existed in our people, but we are seeing it play out in tremendous, fresh ways. We’re piloting new tools and programs for remote working, pivoting in-person client events to become engaging digital experiences and teaming and collaborating in new ways across disciplines and geographies. Our biggest business transformation project to date was launched in June without traveling to the client for months.

Our people are the life force that powers our business. And we’ve even seen resilience in fostering those relationships and finding unique ways to keep our culture alive. We asked a focused team to take this “culture and morale” issue head-on, and they helped us design new, fresh ways to engage our employees, build community and connectedness without the usual constructs of offices and typical gathering places. They’ve created new experiences that will become of the Prophet traditions of tomorrow, like a “Prophet Rocks” virtual concert from teammates (and their families) around the globe, the Prophet Summer Olympics, a soon-to-be-launched Prophet TikTok Dance Challenge, and so many more.  We also created space for weekly “Global Pulse Checks”; a time set aside for the entire firm to gather virtually as a community to unpack current events, share “kudos”, celebrate holidays and milestones and learn from and about one another.

But we also recognize that morale has its own ebbs and flows. The pandemic has put enormous strains on our people – both at work and at home. Over the past six months, we’ve encouraged our people to take the time they need to reflect, refresh and focus on their mental health.  And we focused more and more on creating spaces to welcome and facilitate ongoing dialogue, both in formal and informal ways. We listened as our colleagues grieved over Black lives lost to racism and demanded Prophet do more in the fight for racial equality. We’ve learned that the best way to maintain morale is through open and honest communication. That the more we can communicate, the better we can do for everyone– employees, their families and communities, our clients and society.

Being two years into our own firm transformation has elevated our focus

We began to accelerate our firm’s transformation agenda at the beginning of 2019. We created a Transformation Management Office devoted to aligning our efforts and strategy with our longer-term aspirations. We reconnected with who we wanted to be (an indispensable ally that helps our clients unlock uncommon growth), expanded our superpowers, built upon our strengths and embraced a period of internal growth. Through these efforts, Propheteers have come to embrace a ‘growth mindset,’ which helped us manage the ‘growing pains,’ discover agile ways of working and refreshed our sense of purpose.

We were happy we started this ambitious transformation when we did – as a large focus of it was our own digital transformation and upskilling employees on all things digital. Of course, as we adapted to the global pandemic, we were pleased that a lot of our digital processes were already in place, which made the transition to remote work easier.

“Our people are the life force that powers our business.”

As a leadership team, we remain committed to growing and adapting our offerings to shifting client needs, accelerating our growth momentum and developing a robust incubator and innovation pipeline with net-new offers and IP. We are excited to have the operational and financial strength to continue to invest in this transformation agenda in 2021 and beyond.

Strengthening our commitment to building a diverse, equitable & inclusive workplace

Most recently, we’ve put more investment behind our Diversity, Equity and Inclusion efforts and we know that doing so will play an instrumental role in our long-term growth as a firm.  It’s another reason for our people to be proud and energized to be here.  We have lots of work to do, but we have already engaged actively: Prophet is working to increase our diversity representation, we are developing firmwide training programs focused on antiracism, microaggressions, inclusivity and bias and we are donating $4 million of our pro-bono hours to organizations committed to racial justice.

Our DEI efforts are a large focus for the next six to 12 months. We are currently working with Collective, an outside DEI consulting firm, to evaluate the results of our firm-wide DEI survey, to audit our internal systems and processes and to help deploy a new DEI strategy for Prophet. We’ve rolled out an employee training on unconscious bias and microaggressions and look forward to embracing the other educational opportunities our Learning & Development team is putting together.

Our people team is busy recruiting top talent – including a new Head of DEI for our firm. Our employee resource groups – Women in Leadership, Pride at Prophet and Black at Prophet – are continuing to develop programs that drive the community and advance our inclusivity. Additionally, our offices are hosting monthly ‘Listening Sessions’ to create a space for honest and important conversations on the local level. We know that by making DEI a top business priority, Prophet’s business will only grow. And as we learn more, we will grow better, together.

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We were overwhelmed, in the best way possible, with the discussions we had within Prophet to do more and better in the face of systemic racism, particularly as it impacts the Black community in the US.  When it comes to making Prophet a diverse, equitable and inclusive workplace, the hard work – the intensive transformational work – lies ahead. Our first step is to make a set of specific and measurable commitments as a firm. 

These are Prophet’s commitments to promote racial and social equity both within our firm and our broader communities. 

1. Diversify Our Firm  

Bring in Black team members across every level of the firm. From Board members to partners to consultants, with goals set starting in 2021.

2. Bring in External Expertise

Hire a DEI-specific recruiter in 2020 and a global head of DEI by 2021.  

3. Focus on Education

Develop firmwide training programs focused on antiracism, micro-aggressions, inclusivity and bias. This includes a suite of ongoing training and learning opportunities to further understanding, education and dialogue on issues of diversity and belonging. These global initiatives will be designed to ensure the ability of our teams to launch and participate in self-identifying affinity groups.

4. Support Racial Justice Externally

Commit over $4 million of pro-bono hours over the next five years, to organizations committed to racial justice.

We are committed. We are dedicated. We are ready. 

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A Letter from Prophet CEO Michael Dunn

Like many others, we at Prophet are intensely focused on the rapid rise of COVID-19. And as this virus spreads in new and unexpected ways, our first concerns are–of course–for human safety.

Our worst fears are the most intimate. We’re worried about our own health and protecting our families, especially the very old and the very young. And we’re increasingly concerned with the well-being of those in all our communities. Coworkers. Neighbors. Clients. Friends. Family at a distance.

As the days continue, many of us are facing other fears. Ones focused on financial security – the health of our businesses and the livelihoods of our teams. Many of us are trying not to voice that concern when lives are on the line. But it is there – and for those of us who guided businesses through the economic upheaval of 2008, 2001, or even the early ‘90s and ‘80s, we understand that now more than ever, it is imperative to be a strong leader to help our organizations survive, and maybe even thrive.

Leading in the face of disruption requires a mix of characteristics that are difficult to harness, even when your business is at its strongest. Grit and empathy. Agility and decisiveness. Creativity and rigor. Generosity and fierceness. We need to bring our “A” game each moment, inspiring and drawing inspiration from teams all around us. If we can, we will all find a way through this, together.

“When you find yourself drifting, draw on your strengths and lean into a growth mindset.”

For more than 20 years, we have been studying how organizations, brands and leaders source growth in the face of disruption. Growth that is purpose-led, innovative, relevant and sustaining. By leaning into our organization’s core values and capabilities, by listening hard to our customers and stakeholders and by understanding how their rapidly shifting contexts are creating new needs, we are finding better ways to serve. We are charting new paths.

We’re already starting to embrace new innovations and shifts. Special shopping hours for seniors, take-out 5-star meals, the explosion of telemedicine and distance learning, yoga streamed “live”, 3-D printing hackathons to backfill medical device shortages: these hopeful responses are unfolding all around us.  Pay attention to these actions that speak to the spirit of humanity, the impact of selfless business and the power of collaborative ingenuity.

When you find yourself drifting, draw on your strengths and lean into a growth mindset. Human-centered, digitally powered, purpose-led – find your way to emerge from the Covid-19 crisis stronger and more confident than ever.

Stay healthy and safe,

Michael Dunn

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Marketing is increasingly under pressure to make the most of its brands, its investments and its organization. In the boardroom, leaders ask for accountability and assurance that every dollar spent on marketing is contributing to long-term profitable growth. Although this pressure is particularly intense in tough economic times, the topic is increasingly relevant even in good times.

Marketing must respond through disciplined planning, rigorous measurement and evaluation, and continuous improvements in performance. It has to be able to link the cause and effect of investments, to diagnose performance problems in a timely way, and make fact-based decisions on how to increase return on investment (ROI). Marketing must be efficient and effective at the same time. The keyword is “marketing accountability”—investing in the right tools and content (effectiveness) and optimizing the ratio of investment and output (efficiency).

As a matter of fact, more and more companies are investing in marketing accountability initiatives. However, in many cases, the focus of these initiatives has been too narrow, which diminishes the impact. In order to achieve a sustainable and effective effort, all value levers need to be activated.

The Six Value Levers

Value Lever No. 1: Strategy

A solid strategic foundation is critical, as it sets up a series of choices that informs all downstream value levers. These include, for example, overarching marketing objectives that are derived from the corporate and business strategy, the definition of critical segments and targets, and brand positioning and opportunities for differentiation.

Erroneous assumptions around any one of these issues can fatally undermine the effectiveness of all subsequent marketing investments. Yet in most companies, this pitfall is avoidable with a disciplined and transparent approach. This includes informing all stakeholders about the facts, data, beliefs, and assumptions on which the individual decisions are based in order to develop a shared view of the brand and communication strategy.

This transparent approach is based on a set of well-understood analytical and conceptual techniques involving customer segmentation, target group definition, customer driver analysis, pathway modeling, brand equity modeling, positioning, value propositions, etc. All of these tools can help a company focus on the most promising solutions. When these analytical approaches are combined with creative and innovative ideas, a company typically ends up with a strategic value proposition that is worth its weight in gold.

The medium to long-term strategy needs to be translated into short-term marketing and communication objectives. When defining these objectives for the next planning period, current barriers to communication with the consumer must be taken into consideration. Do we need to focus on increasing our awareness, or should we focus instead on retaining existing customers? These types of questions, together with long-term brand and communication objectives, should indicate which path to pursue.

Value Lever No. 2: Content

The strategic foundation needs to be translated into compelling and engaging messaging that is appropriate for the medium. In this context, “messaging” refers to the entire creative package of taglines, copy, visuals, colors, sound, and iconography that is usually part of a broader communication/content platform. The best content platforms come from a magic combination of strategic insight and creative expression and find a way to connect in authentic, emotionally compelling ways. Here it is crucial for the creative ideas to draw on the themes and guidelines provided by the strategy.

To fuel creativity, a company needs to pursue somewhat independent and competitive paths. It is important to remember that great content ideas can come from anywhere. One method is to provide internal teams as well as external agency partners with a similar briefing. Ideas can also originate from individuals who have creative intuition. Or even from participants whose contributions are collected through crowdsourcing. Irrespective of how the potential messaging platforms are sourced, clever companies make certain to validate their messaging ideas through testing before implementing a full-scale creative campaign. Moreover, the latest academic research also suggests that testing multiple communication ideas is the right way to go.

Value Lever No. 3: Marketing Vehicles

Next, a company needs to make a series of decisions about which kinds of marketing vehicles are the most compelling and effective in delivering against the strategy, messaging objectives, and desired return on investment/objective (ROI/ROO). This implies the set of instruments must be derived directly from the marketing and communication objectives (see value lever no. 1) and not simply based on the mix of vehicles from the previous year, which unfortunately is often the case.

Vehicle choices, when made effectively, should enable your messages to reach and connect with your strategic target audience in a timely, relevant, cost-effective and increasingly, multi-platform way. To do this effectively, you must understand how your target customers interact with media—i.e. where they interact with media and their openness to receive messages in that setting. Additionally, the costs and benefits of the vehicles must be considered.

Making the wrong choices here can torpedo your entire effort to achieve more accountable marketing. It is no small challenge. There is a risk of failure when the vehicles are mismatched with marketing goals or target groups. Another pitfall is not having the necessary resources to effectively execute the right mix of vehicles, which can be summarized by the keyword “under-spending,” i.e., not achieving the efficient zone.

Finally, you must ensure that all vehicles are well integrated, so they appear as a seamless and integrated campaign to your customers. The most important factor here is customer perception—ongoing and consistent communication of the messages massively increases the impact of your advertising and is a critical element of efficient and effective communication.

Value Lever No. 4: Investment Levels

This lever operates in two dimensions—the appropriate investment in marketing activities relative to the overall income statement, and the appropriate level of investment in any given marketing vehicle relative to its intended ROI/ROO and relative to other investment alternatives.

With this value lever, we are trying to diagnose whether the overall marketing investment is too high or too low relative to the ROI/ROO of the proposed marketing activities and the strategic objectives. Defining the exact boundaries of investment is difficult, as there are few solid empirical foundations that would back those boundaries up. An incremental approach is promising: Starting with the current investment level (overall and for a specific vehicle) you can investigate whether an additional investment unit would over-proportionally increase the benefit or whether a reduction of one investment unit would have an under-proportional impact on the ROI/ROO. As a result, you will have a better understanding of how much lift significant increases or decreases in your overall investment levels might provide to the business.

Investment planning and ROI/ROO calculations are always based on assumptions. These assumptions can change quickly. Everything—from target group behavior to competitive activity—can have short-term effects on the ROI. A solid, assumption-based plan is essential, as it makes objective evaluation of results possible over time. It helps to consistently build a pool of KPIs that help plan and evaluate future investments even more accurately.

Value Lever No. 5: In-Market Execution

Even if your company excels with the first four value levers, your overall marketing investment performance can still be adversely impacted by poor implementation. Great content only achieves maximum impact in the market if it is successfully implemented.

“Simplicity, understandability, and transparency of marketing efficiency tools must be woven into daily business routines.”

Planning of this value lever requires key decisions to be made in terms of creative implementation as well as media mix. In both cases, crystal clear briefing is the critical success factor—too often errors are made at this stage. Both the creative and media agencies must have a deep understanding of the strategy, target group, messages, and vehicle mix and align the implementation strategy accordingly. Including a performance bonus in the contract is a very effective instrument to ensure the agency partners make this alignment a top priority. This bonus-malus (Latin for good-bad) system should be based on how well the campaign meets the marketing objectives (for example, increase of specific image attributes, advertising recall). It is most important to ensure that these objectives are highly dependent upon the implementation in order for the agency to have a real influence on outcomes.

Value Lever No. 6: Fixed Cost Management

To fully realize the benefits of a marketing accountability program, a company needs to focus on continuously improving cost efficiency. Better management of fixed costs is crucial. A company needs to focus on all of the costs that go into producing the various marketing programs that your company may employ, such as external agency costs and production costs. The types of fixed costs depend upon the mix of marketing programs. These costs are estimated to amount 20 to 60 percent and are therefore a considerable lever for cost optimization.

The value lever “Fixed Cost Management” demands pragmatic thinking from purchasing or procurement managers. The first step is to develop an understanding of the ratio of “working” and “non-working” spend and to consistently implement strategic sourcing principles. These include, for example, streamlining suppliers and agencies, continuous negotiations of prices, and reengineering overall processes.

How to Successfully “Operate” the Value Levers

There are strong interactions across the six value levers; they do not work independently. An extraordinary marketing program can fail simply because the wrong set of vehicles is applied, or the wrong level of investment is chosen. Evaluating just one lever incorrectly is enough to cause the marketing budget to be misallocated. As a result, a company needs to continuously identify and prioritize those levers, which will best help the company meet its objectives.

Based on experience, a set of principles that significantly increases the success of marketing accountability programs across all value levers can be identified. These are summarized in six critical success factors (see exhibit 2).

Critical Success Factors

Success Factor No. 1: Art & Science

Successful marketing accountability programs employ a combination of both extraordinary quantitative processes and tools and out-of-the-box qualitative concepts. The best mathematical marketing mix models are worthless if they optimize the vehicles without considering the right content. The six value levers show that they can only be fully implemented if a balanced combination of art and science is applied.

Success Factor No. 2: Company-Specific Solutions

Standardized one-size-fits-all efficiency approaches and projects often fail, since they cannot fully consider company-specific context and the most important levers. Additionally, these tools are often highly complicated, resulting in a negative attitude among the intended users of the models. Simplicity, understandability, and transparency of marketing efficiency tools must be woven into daily business routines. Ongoing, long-term success is only achieved when the tools are consistently applied by the relevant employees in the marketing department. As a result, marketing accountability initiatives need to be analyzed, designed, and activated in a way that is relevant to each company.

Success Factor No. 3: Just Do It!

Often, marketing accountability approaches are planned over a long time period before they are applied. Expectations are too high and companies try to engineer relationships between marketing investments and results that are either difficult or impossible to prove. This vision of a 100 percent solution will sooner or later result in a standstill of the marketing accountability initiative. Simple and effective measurement and planning tools build a pragmatic and motivating starting point. Marketing efficiency can start small and then be extended and more sophisticated over time.

Success Factor No. 4: Focus (80/20 Rule) 

The 80/20 rule also holds true in the area of marketing efficiency. Often 20 percent of the value levers can impact 80 percent of the optimization. Therefore, successful marketing efficiency approaches focus on the central levers and activity areas. It can be worthwhile to carefully assess the potential of the individual levers during the analysis phase. This holds true for the analysis in the context of a comprehensive marketing accountability project, as well as for the annual or quarterly evaluation of marketing and communication focus areas.

The 80/20 rule also applies, in particular, to the measurement of effectiveness and efficiency and reporting efforts. In many cases, an extensive list of seemingly random KPIs is measured and documented with an emphasis on breadth rather than the most critical measures. This dilutes the focus and jeopardizes continuous learning and improvement. The success of a marketing vehicle should be based on its ability to achieve its primary objective. For example, if the primary objective of a sampling program is to increase the trial rate of a product, the success of the program needs to be measured against this objective e.g. Cost per Trial (efficiency) or Trial Rate (effectiveness). All other KPIs are secondary.

Success Factor No. 5: Objective-Oriented Approach (ROO)

In many cases, marketing accountability approaches fail because they cannot fully explain financial interdependencies, e.g. the effect an advertising campaign has on total revenues. This is where the basic problem of established ROI concepts lies—the impact of marketing investment on financial results takes too long or is disconnected and depends on many additional determining factors. Therefore, successful approaches combine the ROI perspective with return on objective (ROO, often referred to as ROPI [Return on Program] or ROMI [Return on Marketing Investment]) KPIs. These KPIs address shorter impact periods (e.g. the ability of a campaign to increase specific brand attributes or advertising recall) and therefore are more transparent and motivating, allowing more effective control of the marketing programs.

Success Factor No. 6: Activation Within the Marketing Organization

Only when the marketing accountability approaches are activated within the marketing organization with pragmatic, transparent tools and when the process and tools become part of a commonly shared marketing accountability language, do the marketing accountability approaches realize their full effect. Sustainable marketing efficiency is not created with an annual complex excel spreadsheet—sustainable marketing efficiency happens every day, influencing the planning process of a brand manager, a procurement manager’s negotiation, or at a briefing with a creative agency.

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No longer do forward-thinking companies view branding as merely an advertising campaign or catchy slogan. The brand is better understood as the set of expectations and associations evoked from experience with a company or product — how customers think and feel about what that business or product actually delivers across the board. As such, a brand is built from the customer’s entire experience with a company, its products and its services. And if everyone in the organization helps bring the brand’s promise to life, it’s a sure way to market success. Call it brand operationalization—an organizational discipline that’s reaping rewards for a growing number of businesses.

Itron is a good example. This Spokane-based company transformed itself in the minds of its customers from just a meter-reading company into a provider of energy marketplace data and knowledge. “We recognized that we had to shift both the position of the brand and the way in which we managed it,” says LeRoy Nosbaum, chief executive of Itron.

In doing so, the company made sure all employees were fully educated on the new brand strategy and understood how their roles would help bring the new Itron brand to life. Profit-sharing was even tied to its employees’ ability to live the brand. During the first year of the new brand focus, Nosbaum believes these efforts helped contribute to a huge jump in Itron’s stock price—from $3.70 to more than $32 a share—and an all-time high in employee morale.

Itron has built a brand-driven business in which employees across all organizational levels and functions understand and strive to uphold the brand’s promises and the goals of the brand strategies. But many companies still face the challenge of figuring out how to bring their brand to life in order to similarly fuel long-term, sustainable growth.

To build the kind of brand-based culture and discipline that fosters business growth, Itron “operationalized” its brand, bringing it to life through its people, systems, and processes. Essentially, this means moving the brand’s role and influence well beyond the marketing department so it becomes an integral part of the company’s way of doing business. Achieving that goal hinges on success within five specific brand-driven areas. (See Exhibit 1.)

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Exhibit 1: Key tenets of success

• Align brand and business strategy
• Demonstrate commitment to brand at the top
• Make a consistent impression with customers and stakeholders
• Become a brand-driven organization and culture
• Implement a measurement system

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Branding Meets Strategy

Total alignment between business and brand strategy is a crucial starting point. Think about it: Strategies about customers, distribution, pricing, and communications are crucial links between business and brand strategy. Business strategy cannot be developed in a vacuum. Neither can brand strategy. The connection between them must be aligned and strengthened. If organizations hope to maximize their strategic decision making and brand-building capacity, they must understand the brand and its role within the overall strategy.

Amazon.com is a great example of a company that achieved this alignment and assessed its business issues using the context of the Amazon brand. When customer service costs became a concern, it didn’t do the typical quick fix of cutting people or call center facilities. Rather, its team looked at the roots of the problem, evaluating the issue and possible solutions against Amazon’s brand promise of providing friendly, easy access to products at a fair price.

To keep costs low while responding to customer requests for more specificity with regard to order shipments, Amazon completely overhauled its customer service department and added more self-service components—all without cutting staff or reducing the number of call centers. The results were optimized operations, lower costs, improved service and strengthened brand relevance in the mind of consumers.

Organizations seeking to integrate their brand and business strategies may want to consider three jump-starting tactics:

1. 1. Redefine marketing’s role. Redefining the role of the traditional marketing function means expanding beyond marketing communications activities. This can be done by upgrading the quality of people in the brand management roles within the organization, establishing new corporate brand teams, or hiring an executive team-level individual into a CMO role.
   2. Launch strategic pilot initiatives. Selecting and implementing a few highly visible strategic brand initiatives (i.e., a brand vision or brand positioning) will allow key people to experience the new “brand informed” approach. If that approach is too aggressive, another related option would be to choose a specific business problem (i.e., a distribution channel issue or an acquisition opportunity) and demonstrate how attacking the issue in a brand-informed way would lead to a better resolution.
   3. Develop a senior leadership brand boot camp. The goal here is to immerse senior leadership in the brand through a combination of outside reading, facilitated discussion, and hands-on problem-solving. This will help senior management be more effective when it comes to functioning in a brand-informed strategic environment.

Start at the Top

For the brand to become fully operationalized, the chief executive officer must demonstrate clear and consistent commitment to the brand, and this must be embraced by the senior management team. The CEO must champion the message that the brand is the responsibility of the entire organization, and senior management must support that message.

The CEO of 3M, for example, leads its branding efforts, supported by a brand management committee that’s focused on strategy. The committee is made up of high-level, cross-functional representatives, including the senior vice president of R&D, senior lawyers, and brand experts. As a result, brand involvement is extremely high throughout the organization.

In some organizations, that type of senior-level team is referred to as an executive brand council (EBC). Typically, an EBC brings together the heads of business units and functional areas to act as a team and tackle the tough brand-building issues that may arise, like the acquisition of new brands, the launching of a major new product and licensing agreements.

Kodak is among the companies that have successfully implemented an EBC. Paula Dumas, Kodak’s vice president of industry marketing, says its EBC, composed of the chief executive, chief operating officer, chief financial officer, chief marketing officer, business unit presidents, and external consultants, basically serves as a board of directors for the company’s CMO. The corporation’s annual operating plan reflects specific strategies the brand council has approved. If the company is interested in changing policies tied to the brand or wants new investments to support the brand, these requests must go through the EBC for approval. With the implementation of the EBC, Dumas says, “Brand stewardship is shared by everybody within the company.” The executive brand council ensures commitment at the top, which then filters down throughout the organization.

Stay Consistent

The CEOs of both 3M and Kodak have also recognized that, while they are the linchpins in building a brand-based culture, it takes buy-in from each employee and their consistent delivery of the brand promise across every customer touchpoint to really achieve brand-driven success.

Brand touchpoints are all of the different ways that an organization’s brand interacts with and makes an impression on customers, employees, and other stakeholders. A touchpoint is represented by every action, tactic, or strategy taken to reach a customer or stakeholder. Thus, each time a customer sees one of your ads or makes a call to the customer service center, an opinion is being formed about your brand. Each of these activities falls within the three stages of the customer experience—(1) pre-purchase, (2) purchase (or usage), and (3) post-purchase.

“Each time a customer sees one of your ads or makes a call to the customer service center, an opinion is being formed about your brand.”

Pre-purchase experience touchpoints represent the various ways potential customers interact with your brand prior to deciding to do business with your company. Each pre-purchase touchpoint interaction should be designed to shape perceptions and expectations of the brand, heighten brand awareness, and drive its relevance. They should also help prospects understand the brand’s benefits over competing brands and the value it brings in fulfilling their personal wants and needs.

Purchase or usage experience touchpoints are those that move a customer from considering your brand to actually “purchasing” it. The main objective of these points of interaction is to maximize the value prospects see in your offerings and instill confidence that they have made the right decision in choosing your brand.

Post-purchase experience touchpoints come into play after the “sale” and should maximize the customer experience. Out of all of the brand touchpoints, the ones that fall into this category are the most under-leveraged, even though they offer one of the best opportunities for businesses to drive sustainable and profitable growth. The goals of post-purchase experience touchpoints are to deliver on the brand promise, meet or exceed customer performance and usage expectations, and increase brand loyalty and advocacy.

Often, time and resource constraints keep companies from focusing on every single touchpoint and making sure they’re consistently delivering on your brand. Therefore, you will want to identify those touchpoints that drive the desired brand experience and allocate your resources against them. There are four steps to help determine which touchpoints should be leveraged:

Step 1. Identify the touchpoints that influence customer perception of your brand and then categorize them by the three stages of the customer experience. To ensure the right touchpoints are identified, it’s a good idea to ask multiple departments within your company for their input because many of these touchpoints will come from areas outside of marketing.

Step 2. Develop a deep understanding of how you’re performing from both an internal and external perspective against each of the identified touchpoints. This is crucial in achieving touchpoint alignment because this process helps you learn what affects customer perceptions of the brand and begin to recognize your touchpoint vulnerabilities vs. those of the competition. During this phase eventual touchpoint, “owners” need to get involved so they can better understand the challenges that lie ahead in getting the touchpoint to the desired end state.

Step 3. Prioritize the identified touchpoints and determine which will have an immediate effect on brand perception and experience. Some objective screens to consider include the impact on customers’ perception of the brand; size of the gap; cost of implementation; cost-benefit assessment; the touchpoints’ ability to help the organization achieve its long-term goals and objectives.

Step 4. Implement and manage your high-impact touchpoints on an ongoing basis. At this stage, the touchpoint “owner” is now responsible for executing it as well as educating others on its value and leveraging metrics that ideally will be used in future decisions tied to that touchpoint.

GE’s technology businesses are an excellent example of brand consistency across touchpoints. It continues to invest in integrating its technology and solutions with the right level of customer care and service—particularly at the post-purchase touchpoints—to create a customer experience consistent with the company’s brand promise.

GE has positioned itself as the smartest, safest, and best overall option. To that end, Power Systems designed a comprehensive post-purchase experience to continue to reinforce its promise of being the smartest and safest. It has an account team dedicated to helping solve problems with the company’s current product offerings and regularly provides value-added services. GE continues to invest in new diagnostics, monitoring systems, and business products to help customers lower ongoing operating costs and reduce downtime. It also provides educational and technical information through the Internet, seminars, and customer conferences to maximize the brand customer experience.

Become Brand-Driven

Achieving brand-driven success requires a decided mind shift across the organization. To truly transform your company, all employees must understand the brand’s promises and their role in bringing the brand to life within their functional areas. Additionally, the organization needs to be structured to support, sustain, and develop a brand-based culture.

The first step toward this transformation involves educating the employees about the brand and inspiring them to behave in a way that’s consistent with its promise. When employees understand the brand’s rationale and its emotional components and have the tools and processes to facilitate day-to-day decision making, they’ll start to develop a lasting connection to the brand.

Even well-established brands sometimes need to refresh or realign their culture with their brand. After 7-10 years of “Just do it” and aggressive growth, Nike had hit a wall. With a depressed economy and slowing growth, Nike realized it needed to realign its employees with its brand to help get its business back on track. After reviewing some of the core beliefs about the Nike brand and how they relate to what employees do on a daily basis, Nike developed a set of maxims that communicated the Nike brand. These “Nike Maxims” included statements such as “It is in our nature to innovate,” “Simplify and go,” and “The consumer decides.” The maxims sought to build direct connections between the employees, the company, and the brand and were based on the core belief that Nike’s mission is “to bring inspiration and innovation to every athlete in the world.” The maxims also spoke to the types of behaviors, decision-making styles and attitudes that are consistent with the Nike brand. The team executed a comprehensive worldwide rollout of this initiative through a series of events using multimedia, interactive forums, and local employees talking about how they brought the brand to life in their job.

By using examples of desired employee behavior, providing frameworks and tools for employees to use, and sharing insight and rationale behind the brand, Nike was able to reinvigorate its workforce and inspire them to live the brand.

Measure Your Progress

But how do you know if brand-building activities are working and your efforts are paying off? Internally, such efforts will have more credibility if a measure of progress is in place. The same is true for external brand-building efforts. Implementing measures to gauge brand-building efforts is the fifth step toward operationalizing the brand.

Itron, for example, was able to attribute part of its surge in stock price directly to its brand-building initiatives. How? Internally, Itron used two key metrics: tying brand-building efforts to employee profit-sharing and measuring employee morale.

To motivate employees to live the brand, management devised a reward system. In order to reach a certain level of profit-sharing, its employees had to create a plan for how they would live the brand.

One employee commented that the company’s logo wear was expensive to purchase and that many believed it was really only for those select people who attended marketing events. In response, Itron devised a plan to provide each employee with “brand dollars” to spend on logo wear so they could see and feel the new logo and brand image. Other employees came up with a plan to host “product fairs” and quarterly business meetings as additional ways to share knowledge and ensure all employees fully understood the industry and the products Itron offers.

These are just a few of the ways employees have devised to show their commitment to living the brand every day. At the end of each year, Itron evaluates its employees against its plan to live the brand to determine what level of profit-sharing they’ll receive.

Management also measures employee morale because it provides a good gauge as to whether a positive shift occurred in employees’ attitudes about, and belief in, the company and the Itron brand. Randi Nielson, Itron’s vice president of marketing, says, “Employee morale and belief in the company are higher than they’ve been in 11 years.”

The external perception of the brand is equally important to measure. For Itron, the metrics take on many forms, including the ongoing gathering of real-time feedback. The company also conducts year-end customer satisfaction evaluations as a way to measure progress and jump-start the next year’s brand goals.

A good set of brand metrics will enable your organization to develop the brand strategically and should follow these basic underlying rules:

• Is it simple to use? If the data that is collected isn’t fairly straightforward, you may find that you’ll spend more time measuring the brand rather than on using the information provided by the metric.
• Is it meaningful? To be meaningful and ultimately help improve the brand and in turn the company’s overall performance, the metric must be tied directly to either your corporate goals/objectives, or to a brand touchpoint.
• Is it actionable? You should be able to make a business decision based on this metric.
• Is it repeatable? The way you gather the data must remain consistent each time the metric is measured. Only consider using metrics that will need to be measured once or at most twice per year.
• Is it touchpoint-oriented? You will need to select metrics that best measure the brand touchpoints that matter most to you. Ideally, brand metrics should be set up for each stakeholder group.

It’s important to keep in mind that, when measuring the perception and performance of your brand, the focus must be on the activities that push the organization closer to achieving its business performance goals. This, in turn, will allow you to improve the overall value of the brand. This will be effective only if the company’s brand touchpoint activities are tied directly to improving brand value.

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Companies often engage in an analytical and creative process to develop or review their brand positioning, an exercise often triggered by the need to support a revised business strategy.

One of the risks they may encounter, however, is embarking on positioning development that lacks a strong enough strategic foundation. One way to offset this is by employing a “Brand Archetype” model, which helps define the space in which brands should play, providing strategic direction for the brand positioning.

The Brand Archetype model was inspired by the understanding that brand positioning is dictated by a company’s assets, business situation, and future strategy, as well as the “appetite” for category disruption.

The model has two axes:

• Issues Addressed: This axis refers to the opportunities or issues that the brand wants to address with its positioning. These include “business issues” that are specific to the brand’s current situation, “category issues,” or situations that are typical to the category. Another, “changing the narrative,” means the positioning will address aspects that are not at the core of the current category thinking.
• Message Focus: The second axis provides guidance on the messaging that the brand will want to pursue in its positioning. It might be around “established customer beliefs” that already exist in the category, or around “unclaimed, new territories” which are unexpected and in principle not commonly associated to the different brands in the category.

There are six archetypes that can be explored to help frame the options for positioning:

Archetype 1

In Archetype 1, a brand will invest behind a single, key driver of choice in the category. This archetype is usually present in industries with very clear and stable drivers, and is pursued by brands that can credibly own these drivers today and in the future.

Brands in this space are typically incumbent or strong leading players in their categories. One example in the U.S. is Verizon, which consistently positions its brand around the quality, reach, and superiority of its network, the key driver of choice in the industry that can be fully owned and leveraged by the category leader. In Europe, Banco Santander has been able to win in the category by consistently owning key functional such as size, number of offices, global reach and financial strength, which are increasingly important during the financial crisis.

Brands that are in the position of owning key drivers of choice in their categories should definitely develop a positioning that anchors on Archetype 1. This entails reinforcing leaderships versus trying to force an “emotional positioning” and disregarding what is really driving consumer choice.

Archetype 2

Archetype 2 involves bringing together two seemingly conflicting ideas. It is usually pursued if established category trade-offs can be upended, and by any brand that can identify these “conflicting” ideas and make them work together.

The key challenge in this archetype is making these two conflicting ideas work together in a relevant and credible way. The traditional example of brands playing in Archetype 2 would be when the soda category developed diet or light versions, as at that stage refreshing cool drinks were associated with sugar and weight gain. Bringing those two aspects together was truly differential and resonated well with consumers. A more recent example in the U.S. would be the retailer Target, which successfully proved that shopping for the best prices does not conflict with a premium, and even “stylish” experience.

Archetype 3

Archetype 3 is a “high risk – high return” one. In it a brand will aim to destroy the established thinking of the category by basically commoditizing the key drivers of choice. Brands should pursue Archetype 3 if they don’t have the key assets to compete but they believe there is “another way” in their category.

Many new entrants in established categories embody this archetype. European insurer “Direct Line” has reframed the industry by basically commoditizing the product and delegitimizing the relevance of traditional drivers as the role of the agent and the need for a solid and established company behind the brand. Its brand is trying to convince consumers that car insurance is a commodity with no value added and it should therefore be acquired through a less time-consuming process and at the lowest possible price.

Established or market-leading brands find it difficult to adopt this archetype, as it usually implies a fundamental change in the dominant business model or a price war, which is achievable by new entrants but not by established players with a lot of business to lose if the category gets disrupted.

Archetype 4

Sometimes, a company can win by turning a disadvantage into an advantage. This requires the company to speak in a clear and transparent way, to recognize that it has failed and that has learned from past mistakes and re-emerged stronger and more confident. This archetype should be pursued if the brand believes that it can extract value out of apparent liability.

“The Brand Archetype model was inspired by the understanding that brand positioning is dictated by a company’s assets, business situation, and future strategy, as well as the “appetite” for category disruption.”

The re-branding of Domino’s Pizza is one such example. It has involved explicit and transparent communications of all the negative aspects that the consumer experienced and a public commitment to improving. A more subtle and emotional approach is the Chrysler corporate story, admitting that the company has “lost its way”, but still promising a comeback in a very confident way. To win in this archetype, the brand needs to be able to publically acknowledge its flaws and commit to dealing with them. That’s not easy, and it requires transparent communications, long-term commitment, and internal desire for real change.

Archetype 5

Some categories, particularly in the service sector, generate a great deal of frustration in customers. Archetype 5 focuses on solving key category pain points that are widely known and suffered by customers. This archetype should be pursued if a brand understands that customers are open to a “new way.”

In Europe, insurance company Zurich Financial has positioned its brand in this archetype. Through extensive research it found that category customers felt that the industry was not getting the basics right. In particular, customers didn’t believe their insurer would be there for them if there was a problem or accident. Building on that key industry pain point, Zurich Financial developed the “Zurich Help Point” positioning. It was implemented successfully across all the relevant touchpoints of the customer journey, ensuring that customers believed that the brand will be there for them when needed.

Category pain points are often widely understood by key brands in the market, but not addressed because they either require high levels of investment or would negatively impact sources of revenues. When a brand commits itself to addressing category pain points, it needs to be aware of the financial implications of this move. To succeed with this type of positioning, it will have to act in a way that is not natural (or the norm) to its category.

Archetype 6

The most difficult archetype to tackle is Archetype 6: investing in a driver that it is unexpected for the category. This one can be pursued if there is a white space for differentiation that extends beyond category parameters.

Identifying that white space can prove challenging. A positioning around this archetype takes considerable out-of-the-box thinking that translates into new, bold and big ideas to anchor the brand. A small number of truly successful brands have been created around this archetype, but success takes internal comfort with an idea that cannot be “proved” up front via traditional research. It requires being comfortable with a lower burden of proof and making a final decision almost entirely based on existing information and instincts. When done successfully, it represents a long-term source of competitive advantage.

Camper, the Spanish shoe brand that now has a global presence, is anchored in Archetype 6. The brand basically looked away from all traditional functional and emotional drivers in the category, and has been positioning itself around its capacity to be different. This included claims/campaigns around things like “the walking society” and “a little big company.” A better-known example is Apple, with its focus on design, simplicity, and style in a category that at one stage was dominated by hard-core technology and performance.

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