22 May 2013 | Brand and Marketing | Jennifer Rice

This is the last in a series of three posts exploring the role of brands in creating positive change. The previous post explored the first two Ps of creating world-changing brands, power and permission, and we’ll focus this post on the 2 remaining Ps, perception and portfolio. To start at the beginning, part 1 can be found here.

Perception

If your brand isn’t perceived as sustainable, it would behoove you to start proving otherwise or else do a better job communicating your successes if you are operationally credible. Why? Sustainability is one of many attributes that comprise your reputation; having sufficient deposits in this brand-equity bank account is invaluable in the event of a reputation crisis. And on the positive side, it provides another reason for values-based customers to be loyal.

On that note, let’s tease apart credibility and perception:

• Credibility is whether or not you actually deliver. While most customers assume credibility, that’s unfortunately not the case with influential non-customer stakeholders like NGOs and media.
• Perception is what the market believes to be true about you. Proof is not required, but is essential if you want to change how your brand is perceived.

As mentioned in part 1, BrandLogic’s Sustainability IQ Matrix is a helpful framework for discussing credibility and perception of our two brand examples, Apple and Nike.

• Apple continues to enjoy a tremendous amount of perception of (and permission for) sustainability. It’s consistently listed among the top sustainable brands among consumer polls, which implies a passionately loyal customer base that clearly cared about sustainability and wanted to believe the best about one of their favorite brands. Yet while Apple has been building a foundation to support that positive perception, it continues to stumble on issues like fair labor in China and its withdrawal (and subsequent rejoining) of the EPEAT certification standard. Karen Krosinsky of Truecost writes about Apple’s potential as a sustainability innovator, but to date it remains just that: potential. Apple only scores a 4.5 out of 10 on Greenpeace’s Guide to Greener Electronics.
• Nike worked hard to restore its credibility after reputation-shattering missteps in its supply chain in the 1990s. Back then, perception and credibility were at an all-time low, but the company has made tremendous strides to become a recognized leader in sustainability regardless of sector. You’ll see in the BrandLogic matrix that Nike has much more credibility than perception; as discussed in the previous section on permission, it’s chosen to downplay its sustainability credentials among customers so as not to distract from its core brand attribute of performance. However, this doesn’t have to be an either-or proposition.

Contrast Apple and Nike with IBM, which fundamentally shifted its entire corporate brand to promote a Better Planet. IBM has built the credibility and earned positive customer perceptions. IBM didn’t sit around waiting for customer permission either, although IT inherently has more permission than other sectors.

Lesson: If perception exceeds credibility, start building proof… fast. If credibility exceeds perception, understand your market (is there a segment who’s interested in sustainable products?) and your competition (is there a white-space opportunity?). If the answer is no to both, no worries. If the answer is yes, seriously consider stepping up to be a change-maker among a segment of your customer base in a way that aligns with your brand. Don’t stop doing the things they love you for; you’re a mass brand for a reason.

Portfolio

Here’s where it gets fun. As noted earlier, sustainability and your core brand promise do not need to be mutually exclusive. Let’s see how Nike handles it using our 5 Stages market map:

You’ll see that Nike’s corporate brand is moving into the Transformative zone and sitting firmly in “Green in a Supporting Role” – ie. sustainability is used as a supporting point for the brand, visible to those who care but not to those who don’t. This is a highly desirable aspirational position for most mainstream brands: Nike has built strong credibility and brand equity among non-customer stakeholders and is in a position to lead with customers if and when it chooses to do so. From this position, Nike can use a portfolio approach to dial up or down sustainability based on each product brand’s respective target markets without shifting the corporate brand (for more on sustainable portfolio options, click here.)

• N7 is a cause brand for Native American and Aboriginal communities; the 7 is a reference to the Native American concept that “In every deliberation we must consider the impact of our decisions on the seventh generation.” It sits slightly higher than the corporate brand due to the social cause, although messaging still soft-pedals the environmental benefits of the product line.
• Flyknit, on the other hand, is one of the most sustainable shoes on the market but you’d never know it unless you visited Nike’s corporate media section. Just a few references to decreased waste and lighter materials in general communications would trigger a sense of shared values among a very knowledgeable consumer, but wouldn’t be noticed by most.

I’d like to see one or two more products in the upper green zone, Nike. Ones that are strong on performance while also dialing up a bit more engagement with customers who share your values. Don’t be shy. We need your leadership in creating consumer awareness, preference and behavior change… done in a way that is in alignment with your current brand equities (for more on this, see the previous post).

In summary…

As we think about how brands can be world changers, one of the most important things they can do is affect consumer behavior. Unilever understands that “product in use” is the biggest contributor to its negative impacts, so the company developed the Five Levers for Change to begin moving the needle. Yet consumer behavior goes beyond recycling and hand washing; in fact, we need to drop the word “consumer” altogether. Patagonia encourages its customers to reduce consumption and think about repairing, reusing and recycling. A very different mindset indeed; one that is enjoyed more by private companies than public.

It also means providing options for those who want a choice that matches their values… for the ones who will wear your sustainable brand like a badge of honor, or for those who are on the fence but want to feel good about their purchases. It’s about engaging citizens in doing the right thing, like Marks & Spencer does in so many visible ways like Shwopping and Be the Start.

Yet if brands are waiting for the market to come to them, they’ll wait a long time. This is a call to the Nikes of the world – the brands who are doing good behind the scenes – to step forward, leading with their core brand promise but getting above the radar on sustainability with a segment of receptive customers. Let’s start thinking both/and, not either/or. This is also a call to the Apples of the world who are stingy with their brand power and permission… whose laser focus on aesthetics is like polishing the interior of the Titanic.

This is a call for brand leaders who stand for more than top-line revenue growth and product obsolescence. We need a reinvention of capitalism, and for that we need courageous brands that can show us what’s possible.

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21 May 2013 | Brand and Marketing | Jennifer Rice

Continuing from our previous post, let’s look at two P’s of world-changing brands: power and permission.

Power

World-changing power often depends on a brand’s reach. Logically, global brands and mass-market brands have more power than small or niche “green” brands to truly change the world for the better or for the worse. The largest brands have the most leverage, are usually making the greatest negative impacts, and are desperately needed as key players in social and environmental systems change.  They can bring instant visibility, credibility and collaboration to key issues.

A good example is LAUNCH, a strategic collaboration between Nike and NASA, USAID and the US State Department to seek out ideas and technologies that can create a more sustainable world. Last month Nike convened 150 materials specialists, designers, academics, manufacturers, entrepreneurs and NGOs in green manufacturing at the two-day LAUNCH 2020 Summit. Nike has the brand power to make this type of initiative happen around the world, and it’s well aligned with their brand mission.

Yet if your brand doesn’t have the scale or mass appeal as Apple or Nike, all is not lost. David beat Goliath with a slingshot; you can make an outsized impact as a disrupter. That means you can’t play it safe; your focus should be on industry transformation. One way to do that is to be a market maker, not a market follower. Unlike many risk-averse big brands that wait for a market to show up, it’s the small brands that go out and demonstrate that one exists.

• CafeDirect is now the 5^th largest coffee brand in the UK, demonstrating that consumers appreciate – and will pay for – Fair Trade and ethical certification.
• New Leaf Paper was founded specifically to shift one of the most resource-intensive industries on the planet. New Leaf Everest – its line of bright white writing paper – became the market leader and other paper companies have since followed suit with competing brands.

Permission

Permission is a concept traditionally used in brand extendibility. Permission answers the question, “do customers think it make sense for the brand to play in ‘x’ space?” (I previously wrote about brand extendibility here and here and here.) Apple, Nike, Virgin and others are able to extend into new markets beyond their core offerings because their brands are anchored on how they do business, not on what they make.

Sustainability can be considered a new market for products, services and business models, and mass brands should be seriously evaluating their ability to extend into this space. Not only is it a competitive opportunity in many sectors, it’s critical for systems change. As long as sustainability continues to lurk in the supply chain and operational efficiency, markets won’t move. Consumers won’t change their behavior or vote with their pocketbooks if there are no better options for which to vote. Competition won’t be forced to change how they manufacture products if sustainability doesn’t become a purchase criterion. And for all that to happen, brands can’t sit around waiting for the market to spontaneously create itself. Marketers have been creating markets for non-essentials for hundreds… no, thousands of years. Let’s stop playing it safe now that it really counts.

The extent to which a brand can extend into customer-facing sustainability activities will depend on permission levels. Customers will have a hard time giving permission for sustainable product offerings or initiatives to oil and mining companies, cigarette companies, or fast food companies without some serious and overwhelming proof of addressing the real issues. But companies in benign sectors should investigate not only how much permission they have, but also how relevant sustainability is to customers. In other words, customers may give permission for sustainability but not care enough to make it a purchase criterion.

Nike came to a misguided conclusion (in my opinion) about customer permission levels for sustainably branded shoes back in 2005. As recounted in Business Week:

“The company launched its first line of environmentally friendly shoes, called “Considered,” in 2005. It had high hopes for a walking boot, made with brown hemp fibers, that looked obviously earthy. Critics called the $110 shoes “Air Hobbits” because of their forest-dweller feel and took Nike to task for a design that detracted from its high-tech image. The boots didn’t sell well, and within a year were taken off the shelves. The lesson for Nike was that its green innovations should continue, but its customers shouldn’t be able to tell.

Customers failed to give Nike permission for a shoe that didn’t align with its performance image. A “forest dweller” shoe is more in alignment with Ecco, not Nike; this is a classic brand extendibility failure that likely had nothing to do with sustainability. If Nike had launched a sustainable performance shoe brand, the results may have been very different. And who knows, maybe not. The lesson for Nike and other brands is to invest in knowing exactly where customers give permission and where they don’t.

Next up: We’ll look at brand perception versus credibility, plus using a brand portfolio approach to create flexibility in how you go to market. Click here for part 3. 

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16 May 2013 | Coherence | Jennifer Rice

I am writing a series on Coherence — shifting from silos to systems, creating intentional alignment — on my personal blog. Based on my many years of creating coherence for organizations, I believe it’s a key solution for getting unstuck and making progress on the social and environmental challenges of our day.

The first one is on why coherence is a prerequisite for resilience.  This is a project that will result in a book, so I’d love for you to click over and provide some constructive feedback in the comments section!

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15 May 2013 | Brand and Marketing, Sustainability | Jennifer Rice

While many of us live out our sheltered lives, the rest of our country and world remains trapped in destructive cycles: poverty, climate change, poor health, declining education, habitat destruction, toxic waste… the list goes on. Companies play a huge role in both the problems and the solutions; they’ve been making progress in CSR and sustainability, but it’s been largely through behind-the-scenes efforts to mitigate risk or reduce costs. Social issues are most frequently addressed through philanthropy that’s disconnected from the core business. The big opportunity is to align CSR and sustainability with competitive advantage; ie. creating shared value. And now we’re talking front-of-the-house activities like products, services, and new business models. In other words, we’re talking about brands.

Before we get much farther, let’s get on the same page with the definition of brand. I’ve always defined an effective brand as “a promise delivered.” It’s a believable, differentiated promise of an experience that stakeholders want, and it’s not just hype. It’s integrated and manifested through every touchpoint. The best brands are coherent: they walk their talk, fully aligned around a singular idea. Two good examples of this are Apple and Nike.

• Apple demonstrates “Think Different” in every aspect of its brand, from product design and store design to the innovative iTunes ecosystem that disrupted the music business. It’s an employee recruitment filter and a magnet for likeminded customers.
• Nike’s mission is “to bring inspiration and innovation to every athlete in the world,” which it lives out to such an extent that Fast Company declared it the most innovative company of 2013. And it’s been delivering on the inspiration component (“Just Do It”) for decades.

Both of these brands have the power and permission to make lasting positive impact on the social and environmental issues of our day, but only one of them is actually doing it (and still has plenty of room to do more). One of them has expanded their sphere of coherence beyond the traditional corporate boundaries to include a variety of stakeholders and a host of unlikely partners. It’s leveraging its brand power in innovation to transform its business, products and business model. And it’s open sourcing design standards and best practices to help other industries transform as well.

We use the 5 Stages model of sustainable brand-building to evaluate a brand’s and its competitors’ position from Laggard (score of 1) to Transformative (score of 5). The horizontal axis on the chart below is the average score of 12 internal credibility dimensions (including management/strategy, operations, and industry leadership.) The vertical axis is the average score of 7 market-facing dimensions including brand portfolio, positioning, customer experience and communications. The goal is to “walk more than you talk”… to build internal credibility before dialing up market-facing efforts.

This is a back-of-the-napkin audit of Nike and Apple based on available online information. You can see that Nike is bordering on Transformative in its operational integrity (ie. behind-the-scenes credibility), meaning that it’s going well beyond the usual aspiration to integrate sustainability into its business… its goal is to fundamentally transform the apparel industry. Yet it’s staying well under the “green in a starring role” bar externally. Sustainability is visible through its Better World initiative and The Girl Effect, but you won’t easily find it as an everyday customer if you’re not hunting for it. And for Nike, that’s by design.

Apple, by contrast, has built enough credibility to show up slightly more visibly to the market, but it has stepped back from active promotion of its EPEAT-certified lineup (after getting into a lot of hot water about prioritizing design over the environment.) Disappointing, as I used to point to Apple as a rare example in the computer space that was proudly communicating its sustainable line of laptops. While the company has made progress since starting its efforts in 2005, it still has a long way to go and we see no indication that it’s a high priority for management.

Our 5 Stages framework is different, by the way, than BrandLogic’s Sustainability IQ Matrix that compares credibility versus market perception. Credibility in our model is defined relative to what could be done to transform markets and industries using sustainability, while BrandLogic is based on what is currently being done relative to other businesses using GRI (which is why I have an issue with GRI…. everyone could be lagging but the relative leaders are lauded as sustainable.) Likewise, the market-facing axis incorporates customer perceptions as just one of several other factors, and is more a reflection of strategic brand integration rather than actual market visibility. The BrandLogic model is very useful (and we’ll look at it in detail later)… just different.

In the next two posts, we’ll explore the four P’s of sustainable world-changing brands – power, permission, perception and portfolio – and see how CMOs and brand managers can build positive brand equity and change the world through sustainability while staying true to the brand’s essence and mission. Sound like a tall order? Read on. Click here for part 2. 

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14 May 2013 | Brand and Marketing, Strategy | Jennifer Rice

There’s been a lot of discussion about elevating sustainability and CSR to become a strategic driver of your business. Most companies would like to benefit from their ethical efforts in the form of increased customer attraction and loyalty, yet few have figured out how to do it successfully. When marketing and PR are relied on, it can often backfire in accusations of greenwashing. The secret is to apply brand-strategy principles to build your ethical reputation.

Brand: Who you are, not what you say

First, let’s back up and define what a brand is. More than a logo, tagline or campaign, a brand is a promise delivered. It’s no longer about marketing; it’s about co-creating your reputation with your customers and managing perceptions through your actions. That means your brand could be favorable or unfavorable, depending on how you interact within your ecosystem and whether you’ve actively managed your brand or not.

A brand strategy is, in essence, a focused strategic platform that guides every aspect of the business. It should incorporate 4Ds: desirable by customers, deliverable by the company, distinctive from the competition, and durable over time. It’s a blueprint for how you do business, as well as for the entire customer experience.

Since brand is inherently about building a reputation, it’s not a stretch to say that strategic CSR is all about brand-building… not philanthropy or operational efficiency. The latter are among the tactics to be judiciously identified and tailored to support a desired outcome, which should be to build a clear, consistent and believable reputation among your constituents that engenders preference and loyalty. That desired outcome informs the entire customer experience as well as how you do business.

Five brand portfolio options

A brand portfolio approach provides some much-needed flexibility on building a credible sustainable brand. To decide which one(s) are right for you, you’ll need an understanding of your master (corporate) brand’s permission, perception and credibility… AND a good market segmentation that explores how sustainability attributes actually drive purchase and loyalty for each segment (full disclosure, we can help with this.) Then explore what makes the most sense for your brand using the portfolio options in the image below. The higher your credibility, the farther to the right you can go.

Create an unendorsed product brand

A separate brand (with its own customer experience, distribution channels, etc.) that’s completely anchored on the triple-bottom line puts a bit of distance between it and the parent company. Clorox purchased Burt’s Bees before it had gained credibility, and the Clorox name was nowhere to be found on any customer-facing materials. You’d do this to gain learning from this brand, not to put your unsustainable stamp on it.

Buying is the easier route, but often the ethical brand gets flack for ”selling out” if it’s not handled carefully, and core values still need to be aligned. Building it yourself is harder, but the benefits could easily outweigh the effort required.

Create an Endorsed Product Brand

If there are values-driven buyers in your category (highly likely) AND you have earned the credibility in sustainability, consider launching a product just for them. Clorox Green Works and J&J’s Johnson’s Natural line are good examples. Note that these brands are tied closely to their parent brands, so don’t consider this option unless the parent company is doing its part on the ethics front. If you’ve got the credibility, a product brand is an excellent opportunity to help customers experience your values and simultaneously boost the profit part of the triple bottom line. GreenWorks had captured 42% of the natural cleaner category in a little over a year; and while the market for green products declined after the 2008 recession, it’s starting to trend up again. Check out the Aspirationals, a consumer segment identified by GlobeScan, BBMG and SustainAbility for whom “style is important and so is the quality of products they buy – 82 percent said they would buy more sustainable products if they performed comparable to and/or better than their usual brand.”

Create an Ingredient Brand

Think Westin’s Heavenly Bed or, in the sustainability space, Home Depot’s EcoOptions certification label on over 7,000 products. P&G’s Future Friendly is another good example. An ingredient brand is the ‘special sauce’ that inspires values-based buyers to prefer your brand over competitors’, and should span across multiple products or services. Third-party certifications are more credible, so be sure to have a third party backing your initiative or full transparency on how your products qualify.

Create an Initiative Brand

GE’s Ecomagination is probably the best-known example, as well as Marks & Spencer’s Plan A and Nike’s The Girl Effect. Creating a brand for your ethical initiatives accomplishes several important objectives:

• Helps clarify for employees and customers your ethical value proposition
• Makes it easier to allocate human and financial resources to your initiative (hint: assign a brand manager to own, drive and measure)
• Elevates your social and environmental initiatives above me-too commodity status
• Can also serve as a growth platform for sustainable customer experiences, products and services

There are a few risks of goodwashing with this approach as it’s company-wide and tightly linked to your corporate brand, so be sure that everyone is committed to creating something of unique value that’s completely aligned with a sustainable vision and values. Any misstep by the parent brand may end up discrediting the hard work done to build the ethical initiative brand.

Reposition the Master Brand

In this option, sustainability is fully integrated into the parent corporation; it IS the brand promise. Typically we’d think of niche brands like Seventh Generation, but IBM, Interface FLOR and Unilever are mainstream corporate brands that have achieved this integration without losing sight of the important brand and product attributes that inspire purchase and loyalty.

No hard and fast rules

Please note that there are no easy answers or guidelines here. The most appropriate approach for your company depends on the unique combination of your customers, their expectations and perceptions of your brand versus other options, the progress you’ve made in the ethical realm, whether or not you actually have a clearly defined brand promise, the commitment level from your executive team… I could go on, but you get the point.

I’m happy to have a preliminary discussion with you about the right approach and key considerations for your business; just contact me at jennifer@fruitfulstrategy.com.

919 Commentshttp://www.fruitfulstrategy.com/blog/2013/05/portfolio-approach/A+portfolio+approach+for+building+a+credible+sustainable+brand2013-05-14+17%3A15%3A12Jennifer+Rice