ANA Annual Meeting 2016

How CVS Won By Not Selling Cigarettes

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ANA Masters of Marketing: 'Building a Sustainable Brand' with Norman de Greve, CVS
ANA Masters of Marketing: 'Building a Sustainable Brand' with Norman de Greve, CVS Credit: Clarion Picture
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There's a difference between actually having a brand purpose and just talking about having one. Two years ago, CVS Health took the bold step of eliminating all tobacco products in its stores in order to promote better health and ensure fitness -- the tobacco category had previously accounted for $2 billion of the Woonsocket, R.I.-based drugstore chain's sales.

CVS, which was founded in 1963, worked with its agency BBDO to introduce its new brand purpose, that "Health is everything," and changed its name from CVS Caremark to CVS Health. A brand video showing the different faces of CVS customers promoted a new heart logo and tagline.

"There's a whole lot of talk about being a purpose-driven brand," said Norman de Greve, senior VP, chief marketing officer of the $153.3 billion brand, speaking at the Association of National Advertisers' Masters of Marketing conference. "But I contend it's impossible to be a purpose-driven brand unless you are a purpose driven-company -- ours is helping people on their path to better health."

He noted that the rebranding drove results. CVS found that 40% more influencers saw it as a leader in helping to improve overall health in 2015 compared with 2014. The company was listed as one of the most innovative and one of the most admired in various business publications. In addition, more than 500,000 people visited CVS's smoking cessation hub and 260,000 smokers sought advice from its pharmacy on quitting. CVS spent $82.9 million on measured media in the U.S. last year, according to Ad Age's Datacenter.

"Broadcasting our purpose is changing how we work," said Mr. de Greve, noting that CVS employees have since been more inspired to work for a company with a conscience.

Such leadership -- CVS is the only drugstore to date to eliminate tobacco -- is a far cry from the chain's previous brand perception. Before September of 2014, CVS was literally the butt of jokes, including a bit from comedian Jimmy Kimmel comparing its receipts to toilet paper.

"Being purpose-driven is much more than a marketing strategy," said Mr. de Greve. "It drives our operations, our acquisitions, our budget -- we have embedded it in everything we do."