Bold is an attitude of mind, but it’s measured by how you behave. As we emerge from the recession it is becoming evident that those brands that have stayed true to their purpose and focused on differentiation are those that are gaining and sustaining market share. A perfect example of this is Apple that has continued to gain market share throughout the recession and now earns about twice as much per customer as it rivals. But Apple is not driven by making money, but making a difference. As Steve Jobs once said, “We’re here to put a dent in the universe.”
Now, more than ever before, it takes guts to be bold in business—to defy conventional wisdom, to walk against the crowd and to try out new ways of doing things in the full glare of social media. Whether it is Virgin Galactic deciding to design a new space ship because of customer feedback, Six Senses Resorts refusing to offer branded bottled water in their luxury hotels to reduce their carbon footprint, or Progressive Insurance telling customers when their competitors offer a better deal. These brands are bold—bold in thought, bold in action and bold in measuring their success in new ways. They don’t try to second guess what customers want or ‘dress up’ to please them; they have a very clear sense of what they want to stand for and then stick to it. As Renzo Rosso, the founder of Diesel puts it;
“Diesel is an attitude. It is about being brave, being confident with one self, wanting to innovate and challenge, and never being satisfied.
However, you don’t have to be a niche player or have a charismatic leader to be bold. O2 has gained significant market share and is now the best performing telco in the UK through its focus on those valuable customers it calls ‘fans’ and its strategy of differentiating on the customer experience. O2 asked the question ‘How can we provide value to our best customers in a way that no one else can?’ This question and their deep understanding of the preferences of their best customers, led to the licensing of the Millennium Dome as the O2 Arena. The O2 is now the most successful entertainment venue in the world and the brand provides privileged access to leading musical acts for its customers. O2 now has more ‘fans’ than any of its rivals achieving a Net Promoter Score of 24% in a sector where the average is just 3% according to the 2010 Satmetrix benchmark results.
Sometimes boldness is about challenging traditional thinking. For example, finding itself later to market in China than its competitors, TNT Global Express realised that it would be very expensive to compete on the basis of infrastructure. Instead it chose to differentiate on the basis of a superior customer experience.
However, fundamental to this strategy was creating an internal culture that was aligned with the customer experience. Iman Stratenus, the head of TNT Global Express China, embarked on a ‘culture tour’ visiting every depot and office in China to personally share the vision and ask employee what they needed to achieve it. This process has led to TNT reducing employee turnover from 36% in 2006 to 9% in 2009 and increasing employee engagement from 73% to 85% over the same period in a culture which has seen labour traditionally as a commodity. In the process TNT has increased customer satisfaction and market share significantly.
A recent survey found that consumers are increasingly inclined to favour those brands that have a social conscience and are prepared to give something back to the world. 71% of consumers think brands and companies spend too much on advertising and marketing and should put more into good causes, 64% would recommend a brand that supports a good cause, up from 52% in 2008. The fact that is that in the wake of the financial crisis and subsequent bail-out of the banks, consumers are angry and jaded with brands, like some banks, that come back from virtual bankruptcy only to make huge amounts of profit but contribute little to the societies in which they exist.
I am not talking here about the almost obligatory platitudes about CSR in the annual report or the token payments to charity, but about being brave enough to risk earnings through sticking to a point of principle. Patagonia, the outdoor clothing company, is one such brand. It deliberately makes clothing that has maximum longevity and minimum impact on the environment in the manufacturing process, despite the higher costs and lower revenues associated with this approach. As one satisfied customer blogged;
“Not a lot of companies strive to sell less by making better products that last longer and make you feel great about buying them. They walk their talk every day and every mile… something that empowers their customers to do the same.”
These examples and more are drawn from the research we are conducting for our new book-‘Bold- How to be brave in business and win’ to be published in early 2011 by FT Prentice Hall. This book will tell the story of 14 great brands from Air Asia X to Zappos and how they are transforming their industries.
If you are an executive of a medium to large organisation and would like to receive an executive summary of our book, all you need do is to go to the following website and complete the short survey that you will find there.