Be True to Your Core
Customers today are armed with the technology to look beneath a brand's attractive wrapping. They want to know about the company that made the product, and whether it shares the same core beliefs and values. And that's where a lot of brands get into trouble. Companies spend so much time focusing on the brand concept that they forget to step back and consider its purpose. You want to make money for your business, employees, and shareholders. But how can you translate fiscal health into a purposeful brand that connects with customers? Start at your core. And then build your company around it.
A natural place to begin is a founder's vision. Adam Lowry and Eric Ryan started with a Humanifesto when launching Method in 2001. They believed they could bring their own sense of style and eco-conscious lifestyle to the stodgy world of household cleaners. Cleaning products were going to be delivered in clean, innovative packaging and be made from eco-friendly ingredients. The founders knew that using natural ingredients and non-traditional product design would be more expensive, so they built a premium brand that offered higher margins to cover those costs. Today, Method's hand soap is a "home accessory," and the company has $40 million in annual sales.
A strong corporate vision can launch a brand, but great companies constantly reinforce and engage employees. They find ways to turn employees into believers and jobs into a mission.
Why do Ritz-Carlton and Nordstrom rank consistently at the top of their respective industries in customer satisfaction? They immediately foster a culture of service in employees of all levels to create a luxury brand. Their formula is simple. Hire quality people, train them relentlessly, and then systematically reward them for customer-centric behavior.
Ritz Carlton has its famous Gold Standards, offered by founders Caesar Ritz and August Escoffier. Every employee always carries a gold notecard inscribed with the values of responding to customer problems and constantly seeking self-improvement. Each shift begins with a 15-minute discussion of principles in a mini-training session. The average employee receives 232 hours of training per year. Enough said.
Nordstrom excels at identifying customer service "heroes." Sales staff are rewarded with spontaneous cash awards and preferred working schedules. Those same employees are recognized over the company's intercom system before the doors open every day. In addition to positive reinforcement, Nordstrom also fosters healthy sales competition by making sales figures public. Every employee can access sales figures from all departments and stores within the chain-so they constantly know where they stand.
And it's a system that is improving the bottom line. Ritz-Carlton has grown sales at a rate of 12.7 percent over the past five years (the rest of the luxury hotel industry is at 1.8 percent). Nordstrom's has grown U.S. sales at 8.3 percent, all other nondiscount department stores have declined 1.6 percent.
And others like Kodak have to evolve their mission to meet a changing marketplace without losing their core values. Kodak was once a cutting-edge corporation until it failed to recognize the impact of digital photography. Seemingly overnight, it had a stagnant business model and its main revenue source, film, was seen as a tired product by the marketplace. It was then that Kodak CEO Antonio Perez realized that it wasn't enough to change the product mix at Kodak-there needed to be a cultural shift as well.
Perez determined to make Kodak the "Apple" of the film world, re-envisioned the mission to help people manage their pictures online and develop personal libraries of digital photos. To engender internal buy-in, Perez was forced to clean house. Only three of the 21 executives in 2003 remain with most of the new hires coming from a digital background. Perez also capitalized on natural skeptics in his organization, grouping them together as "rebels," and asking them for suggestions about how the company could take a different direction and improve services. He reached out to other corporations to find ways of collaborating on new products or services. Suddenly, Kodak is an innovator again. Kodak, a likely candidate for a corporate takeover in 2000, has engineered a successful turnaround. In the first nine months of 2007, Kodak earned $461 million compared to a loss of $617 million for the previous year.
Even as your brand succeeds, the price of success is eternal vigilance. Your company needs to move quickly in the wake of missteps or customer dissatisfaction. It seems you are only as good as your sincerest apology. Apple CEO Steve Jobs issued his iPology in the wake of the rapid price drop on iPhones just 60 days after the launch. Consumers were irate that early adopters had been seemingly punished by $200. Jobs quickly responded with a $100 store credit and an apology for the timing of the price cut. He knew that the cool cache of his brand was in jeopardy and immediately stepped forward to admit the move was a mistake. It didn't completely mollify customers, but it shortened the news cycle of the story and turned some of the negative attention into a postive. It also strengthened the perception that Apple understands its customers, even when it makes mistakes.
Good brands have bad days. But brands that stay true to their core will receive forgiveness. And that is how you can weather the good and bad times.
A strong corporate vision can launch a brand, but great companies constantly reinforce and engage employees. They find ways to turn employees into believers and jobs into a mission.
Why do Ritz-Carlton and Nordstrom rank consistently at the top of their respective industries in customer satisfaction? They immediately foster a culture of service in employees of all levels to create a luxury brand. Their formula is simple. Hire quality people, train them relentlessly, and then systematically reward them for customer-centric behavior.
Ritz Carlton has its famous Gold Standards, offered by founders Caesar Ritz and August Escoffier. Every employee always carries a gold notecard inscribed with the values of responding to customer problems and constantly seeking self-improvement. Each shift begins with a 15-minute discussion of principles in a mini-training session. The average employee receives 232 hours of training per year. Enough said.
Nordstrom excels at identifying customer service "heroes." Sales staff are rewarded with spontaneous cash awards and preferred working schedules. Those same employees are recognized over the company's intercom system before the doors open every day. In addition to positive reinforcement, Nordstrom also fosters healthy sales competition by making sales figures public. Every employee can access sales figures from all departments and stores within the chain-so they constantly know where they stand.
And it's a system that is improving the bottom line. Ritz-Carlton has grown sales at a rate of 12.7 percent over the past five years (the rest of the luxury hotel industry is at 1.8 percent). Nordstrom's has grown U.S. sales at 8.3 percent, all other nondiscount department stores have declined 1.6 percent.
And others like Kodak have to evolve their mission to meet a changing marketplace without losing their core values. Kodak was once a cutting-edge corporation until it failed to recognize the impact of digital photography. Seemingly overnight, it had a stagnant business model and its main revenue source, film, was seen as a tired product by the marketplace. It was then that Kodak CEO Antonio Perez realized that it wasn't enough to change the product mix at Kodak-there needed to be a cultural shift as well.
Perez determined to make Kodak the "Apple" of the film world, re-envisioned the mission to help people manage their pictures online and develop personal libraries of digital photos. To engender internal buy-in, Perez was forced to clean house. Only three of the 21 executives in 2003 remain with most of the new hires coming from a digital background. Perez also capitalized on natural skeptics in his organization, grouping them together as "rebels," and asking them for suggestions about how the company could take a different direction and improve services. He reached out to other corporations to find ways of collaborating on new products or services. Suddenly, Kodak is an innovator again. Kodak, a likely candidate for a corporate takeover in 2000, has engineered a successful turnaround. In the first nine months of 2007, Kodak earned $461 million compared to a loss of $617 million for the previous year.
Even as your brand succeeds, the price of success is eternal vigilance. Your company needs to move quickly in the wake of missteps or customer dissatisfaction. It seems you are only as good as your sincerest apology. Apple CEO Steve Jobs issued his iPology in the wake of the rapid price drop on iPhones just 60 days after the launch. Consumers were irate that early adopters had been seemingly punished by $200. Jobs quickly responded with a $100 store credit and an apology for the timing of the price cut. He knew that the cool cache of his brand was in jeopardy and immediately stepped forward to admit the move was a mistake. It didn't completely mollify customers, but it shortened the news cycle of the story and turned some of the negative attention into a postive. It also strengthened the perception that Apple understands its customers, even when it makes mistakes.
Good brands have bad days. But brands that stay true to their core will receive forgiveness. And that is how you can weather the good and bad times.
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