The Purpose-Driven Brand

Since the beginning of time to this very moment, we humans have been driven by purpose. Consciously and unconsciously, we seek meaning in our lives and the need to actively make a difference and leave a personal legacy of good when we move on from this existence. Jung addresses this in his Individuation process and so, too, do modern and past psychologists and researchers of human behavior drivers.

Since the beginning of time to this very moment, we humans have been driven by purpose. Consciously and unconsciously, we seek meaning in our lives and the need to actively make a difference and leave a personal legacy of good when we move on from this existence. Jung addresses this in his Individuation process and so, too, do modern and past psychologists and researchers of human behavior drivers.

Rick Warren, founder of The Saddleback Ministries, and best-selling author, discovered just how powerful our need and drive for purpose is when he wrote, “The Purpose-Driven Life: What on Earth Am I Here For?” Written in 2003, this book became the bestselling hardback non-fiction book in history, and is the second most-translated book in the world, after the Bible.

Today’s consumer seeks purpose outside of the traditional methods of religion, volunteerism, and random acts of kindness toward friends and strangers. Many of us, in fact most of us, seek to further our sense of purpose with our choices at the grocery store, online shopping carts and more. According to research by Cone Communications and Edelman, consumers in the U.S. are more likely to trust a brand that shows its direct impact on society (opens as a PDF). Others, upwards of 80 percent, are more likely to purchase from a company that can quantifiably show how it makes a difference in people’s lives—beyond just adding to the investment portfolio of a very select few.

According to the Merriam Webster dictionary, purpose is defined as:

: the reason why something is done or used
: the aim or intention of something
: the feeling of being determined to do or achieve something

Consumers are not just expecting big business to define a social purpose for the brand, they are demanding it by how they are making purchasing and loyalty choices. Edelman’s “Good Purpose Study,” released in 2012 and covering a five-year study of consumers worldwide shows:

  • 47 percent of global consumers buy brands that support a good cause atleast monthly, a 47 percent increase in just two years.
  • 72 percent of consumers wouldrecommend a brand that supports a good cause over one that doesn’t, a 39 percent increase since 2008
  • 71 percent of consumers would help a brand promote its products or services if there is a good cause behind them, representing a growth of 34 percent since 2008
  • 73 percent ofconsumers would switch brands ifa different brand of similar quality supported a good cause, which is a 9 percent increase since 2009

Another research group, Cone Communications, showed that 89 percent of consumers are likely to switch brands to one that is associated with a good cause if price and quality are similar; and 88 percent want to hear what brands are doing to have a real impact, not just that they are spending resources toward a cause.

This new state of consumerism doesn’t just show people still have a heart and soul, it is a big flag to brands in all industries to integrate CSR or Corporate Social Responsibility into their brand fiber, customer experience and marketing programs.

I interviewed William L. “Toby” Usnik, Chief CSR Officer for Christie’s in New York City, who maintains that CSR has moved far beyond writing a check and then emotionally moving on from a cause or community in need. It is about a brand’s purpose being bigger than developing its return to shareholders. Validating Usnik is a recent article published in the March 21, 2015, edition of The Economist, quoting Jack Welch of GE fame as saying “pursuing shareholder value as a strategy was ‘the dumbest idea ever.’ ” While that might be debatable, it is becoming less and less debatable, per the statistics above that show how defining a brand’s purpose in terms of the social good it delivers to communities related to its business is anything but “dumbest”—and rather, is getting smarter and smarter by the day.

Charting new territory in his role as Chief CSR Officer for Christie’s, Usnik’s first step was to define CSR as it relates to human psychology and the values of the Christie’s brand. For Usnik, it starts with building a brand’s purpose around Maslow’s hierarchy of needs and helping your constituents get closer to self-actualization, or that state of reaching a higher purpose for a greater good.

“Moving customers upwards through Maslow’s hierarchy of needs is critical to address,” says Usnik. “Customers of all ages, and especially Millennials, are moving toward a state of self-actualization and looking to define their purpose and place in communities and the world. They seek relationships with brands that are doing the same within their own value set. As a result, any business today needs to ask itself, ‘What is the impact of our activities on each other, the community, the workplace, customers and the planet?’ “

Defining your brand’s purpose and corresponding CSR efforts is the first step to developing emotional and psychological bonds with internal and external customers. When you make your CSR actionable by engaging others in your cause, you can build passion and loyalty that not only define your brand, but also your profitability. Coke defines its brand through its happiness campaign that involves delivering free Coke and other items, like sports equipment and toys, to villages around the world, and through water sanitization programs.

Tom’s Shoes, an example that is known to most as one of the pioneers in philanthropic branding, went from $9 million to $21 million in revenue in just three years by being a “purpose-driven brand” that enables people to give back to others simply by making a purchase. With a cost of goods sold of $9 and a sale price of more than $60, that is not hard to do.

At Christie’s CSR, is a big part of CRM. According to Usnik, Christie’s helps many of its customers sell high-value works of art. Many customers then donate the proceeds to social causes that align with their personal values or passions. By helping customers turn wealth into support for charitable causes, they actually create strong emotional bonds with customers, rooted in empathy and understanding—which is far more critical for securing lifetime value than points and reward programs.

In just 2014, $300 million in sales were facilitated through Christie’s that benefited non-profit organizations. Additionally, Christie’s regularly volunteers its charity auctioneers to nonprofit events. And in 2014, he estimates they’ve raised $58 million for 300 organizations.

The key to successful branding via CSR programs and purpose-driven strategies that transcend all levels of an organization and penetrate the psyche of we humans striving to define our role in this world is sincerity. Anything less simply backfires. Brands must be sincere about caring to support worthwhile causes related to their field, and they must be sincere when involving customers in charitable giving.

Concludes Usnik, “You can’t fake caring. If you pretend to care about a cause you align with, or a cause that is important to your customer, [you] won’t succeed. Caring to make a difference must be part of your culture, your drive and your passion at all levels. If you and your employees spend time and personal energy to work closely with your customers to make a difference for your selected causes and those of your customers, you are far more likely to secure long-term business and loyalty and overall profitable client relationships.”

Takeaway: The five primary drivers of human behavior, according to psychologist Jon Haidt of the University of Virginia and author of “The Happiness Hypothesis,” are centered around our innate need to nurture others, further worthy causes, make a difference in the world, align with good and help others. When brands can define themselves around these needs, we not only influence human behavior for the greater good, we can influence purchasing behavior for the long-term good of our individual brands. And per the Edelman research, 76 percent of customers around the world say its okay for brands to support good causes and make money at the same time. So define your purpose, build your plan, engage your customers and shine on!

What Customer-Centric, Customer-Obsessed Companies Must Do

In building relationships with and value for customers, my longtime observation is most organizations tend to progress through several stages of performance: customer awareness, customer sensitivity, customer focus and customer obsession. Here is the “executive summary” version of some conditions of each stage.

In building relationships with and value for customers, my longtime observation is most organizations tend to progress through several stages of performance: customer awareness, customer sensitivity, customer focus and customer obsession.

Here is the “executive summary” version of some conditions of each stage.

Customer Awareness
Customers are known, but in the aggregate. The organization believes it can select its customers and understand their needs. Measurement of performance is rudimentary, if it exists at all; and customer data are siloed. There’s a traditional, hierarchical, top-down management model, with “chimneyed” or “smokestack” communication (goes up or down, but not horizontal) with little evidence of teaming.

Customer Sensitivity
Customers are known, but still mostly in the aggregate. Customer service is somewhat more evident (though still viewed as a cost center), with a focus on complaint and problem resolution (but not proactive complaint generation; internal groups tend to point fingers and blame each other for negative customer issues). Measurement is mostly around customer attitudes and functional transactions, i.e. satisfaction, with little awareness of emotional relationship drivers. The organization has a principally traditional, hierarchical, top-down management model, with “chimneyed” or “smokestack” communication (goes up or down, but not horizontal), with some evidence of teaming (mostly in areas of complaint resolution).

Customer Focus
Customers are both known and valued, down to the individual level, and they are recognized as having different needs, both functional and emotional. The customer life cycle is front-and-center; and performance measurement is much more about emotion and value drivers than satisfaction. Service and value provision is regarded as an enterprise priority; and customer stabilization and recovery are goals when problems or complaints arise. Communication and collaboration with customers, between employees, and between employees and customers is featured. Management model and style is considerably more horizontal, with greater emphasis on teaming to improve customer value processes.

It’s notable that, at this more evolved and advanced stage of enterprise customer-centricity, complaints are thought of more in terms of a life cycle component, and recovery is more of a strategy than a resolution.

Customer Obsession
Throughout the organization, customer needs and expectations—especially those that are emotional—are well understood, and response is appropriate (and often proactive).

Everyone is involved in providing value to customers—from C-suite to front-line—and everyone understands his/her role. Customer behavior is recognized as essential to enterprise success, and optimal relationships are sought.

Performance measurement is focused, and shared, on what most monetizes customer behavior (loyalty, emotion and communication metrics—such as brand-bonding and advocacy—replace satisfaction and recommendation).

Customer service (along with pipelines and processes) is an enterprise priority, and seen as a vital, and profitable, element of value delivery.

The management model is far more horizontal, replacing traditional hierarchy; and there is an emphasis on teaming and inclusion of customers to create or enhance value.

Companies that are customer-obsessed, and what makes them both unique and successful, have been extensively profiled by consultants and the business press. Often, they go so far as to create emotionally driven, engaged and even branded experiences for their customers, strategically differentiating them from their peers.

In addition, these companies focus on the complete customer life cycle, and much more on retention, loyalty and risk mitigation (and even winback) than acquisition. Support experiences are strategic, nimble and seamless, and often omnichannel. Multiple sources of data are used to develop insights. Recognizing the information needs of their customers, they invest in altruistic content creation (over advertising); and they communicate proactively and in as personalized a manner as possible

Customer obsession, what I refer to as “inside-out” customer-centricity, has been a frequent subject of my blogs and articles: One of Albert Einstein’s iconic quotes reflects the complete dedication of resources and values needed for an organization to optimize its relationships with customers: “Only one who devotes himself to a cause with his whole strength and soul can be a true master.” Mastery requires, as well, a storehouse of experience coming from experimentation; so, just like in the pole vault and high jump, we can expect that the customer-centricity bar will continue to be raised.

When Companies Lose Customers …

United Parcel Service suffered staggering customer defection as a consequence of its 15-day Teamsters work stoppage in 1997. The result was that, even after their 80,000 drivers were back behind the wheels of their delivery trucks or tractor-trailers, many thousands of UPS workers were laid off. A UPS manager in Arkansas was quoted as saying: “To the degree that our customers come back will dictate whether those jobs come back.”

United Parcel Service suffered staggering customer defection as a consequence of its 15-day Teamsters work stoppage in 1997. The result was that, even after their 80,000 drivers were back behind the wheels of their delivery trucks or tractor-trailers, many thousands of UPS workers were laid off. A UPS manager in Arkansas was quoted as saying: “To the degree that our customers come back will dictate whether those jobs come back.”

The UPS loss was a gain for Federal Express, Airborne, RPS and even the United States Postal Service. They provided services during the strike that made UPS’ customers see the dangers of using a single delivery company to handle their packages and parcels. FedEx, for example, reported expecting to keep as much as 25 percent of the 850,000 additional packages it delivered each day of the strike.

UPS’ customer loss woes and the impact on its employees was a very public display of the consequences of customer turnover. Most customer loss is relatively unseen, but it has been determined that many companies lose between 10 percent and 40 percent of their customers each year. Still more customers fall into a level of dormancy, or reduced “share of customer” with their current supplier, moving their business to other companies, thus decreasing the amount they spend with the original supplier. The economic impact on companies, not to mention the crushing moral effect on employees—downsizing, rightsizing, plant closings, layoffs, etc.—are the real effects of customer loss.

Lost jobs and lost profits propelled UPS into an aggressive win-back mode as soon as the strike was settled. Customers began receiving phone calls from UPS officials assuring them that UPS was back in business, apologizing for the inconvenience and pledging that their former reliability had been restored. Drivers dropping by for pick-ups were cheerful and confident, and they reinforced that things were back to normal. UPS issued letters of apology and discount certificates to customers to further help heal the wounds and rebuild trust. And face-to-face meetings with customers large and small were initiated by UPS—all with the goal of getting the business back.

These win-back initiatives formed an important bridge of recovery back to the customer. And it worked. The actions, coupled with the company’s cost-effective services, continuing advances in shipping technology, and the dramatic growth of online shopping, enabled UPS to reinstate many laid off workers while increasing its profits a remarkable 87 percent in the year following the devastating strike.

UPS is hardly an isolated case. Protecting customer relationships in these uncertain times is a fact of life for every business. We’ve entered a new era of customer defection, where customer churn is reaching epidemic proportions and is wrecking businesses and lives along the way. It’s time to truly understand the consequences of customer loss and, in turn, apply proven win-back strategies to regain these valuable customers.

Nowhere are the effects of customer defection more visible than in the world of Internet and mobile commerce, where the opportunities for customer loss occur at warp speed. E-tailers and Web service companies are spending incredible sums of money to draw customers to their sites, and to modify their messages and images so that they are compatible and user-friendly on all devices. Because of this, relatively few of these companies, including many well-established sites, have turned a profit. Customer loss (and lack of recovery) is a key contributor. E-customers have proven to be a high-maintenance lot. They want value, and they want it fast. These customers show little tolerance for poor Web architecture and navigation, difficult to read pages, and outdated information or insufficient customer service. Expectations for user experience are very high, and rising rapidly.

Internet and mobile customers, to be sure, have some of the same value delivery needs as brick-and-mortar customers; but, they are also different from brick-and-mortar customers in many important and loyalty-leveraging respects. They are more demanding and require much more contact. They require multi-layer benefits, in the form of personalization, choice, customized experience, privacy, current information, competitive pricing and feedback. They want partnering and networking opportunities. When site download times are too long, order placement mechanisms too cumbersome, order acknowledgment too slow, or customer service too overwhelmed to respond in a timely fashion, online shoppers will quickly abandon their purchase transactions or not repeat them. Further, they are highly unlikely to return to a site which has caused negative experiences.

What’s more, the new communication channels also serve as a high-speed information pathway for negative customer opinion. If unhappy customers in the brick-and-mortar world usually express their displeasure to between two and 20 people, on the Internet, angry former customers have the opportunity to impact thousands more. There are now scores of sites offering similar negative messages about companies in many industries, and giving customers, and even former employees, a place to express grievances. It’s a new form of angry former customer sabotage, which adds to the economic and cultural effect of customer turnover.

For many of these sites, part of their charter is to help consumers find value; and, like us, they understand that customers will provide loyalty in exchange for value. They also recognize that the absence of value drives customer loss, and that insufficient or ineffective feedback handling processes can create high turnover. As one states: “The Internet is the most consumer-centric medium in history—and we will help consumers use it to their greatest personal advantage. We will increase the influence of individuals through networks of millions. We will raise the stakes for companies to respond. We will require companies to respect consumers’ choice, privacy and time, and will expose those that do not.” This may sound a bit like Orwell’s “Animal Farm,” but it does acknowledge the power of negative, as well as positive, customer feedback.

Some businesses seem minimally concerned about losing a customer; but the only thing worse than the loss of high value customers is neglecting the opportunity to win them back. When customer lifetime value is interrupted, it often makes both economic and cultural sense for the company to make an active, serious effort to recover them. This is true for both business-to-business and consumer products or services.

So how does a company defend itself against the perils of customer loss? The best plan, of course, is a proactive one that anticipates customer defection and works hard to lessen the risk. Companies need defection-proofing strategies, including intelligent gathering and application of customer data, the use of customer teams, creating employee loyalty, engagement and ambassadorship, and the basic strategy of targeting the right kind of customers in the first place. But in today’s hyper-competitive marketplace, no retention or relationship program is complete without a save and win-back component. There is mounting evidence that the probability of win-back success and the benefits surrounding it far outweigh the investment costs. Yet, most companies are largely unprepared to address this opportunity. It’s costing them dearly, and even driving them out of business.

Building and sustaining customer loyalty behavior is harder than ever before. Now is the time to put in place specific strategies and tools for winning back lost customers, saving customers on the brink of defection and making your company defection-proof.