The relatively easy growth of recent years—driven by discounting, distribution, and product size—has been tapped out. Now growth needs to come from new places as consumers demand more.
Despite marketing department tensions between long versus short term, loyalty versus conversion and values versus value, a new and differentiated approach is emerging—one that allows a deeper relationship with consumers while growing the business. It’s arguably best exemplified by outdoor clothing and gear retailer Patagonia.
CEO Ryan Gellert says that Patagonia’s success came from showing that business can help change the world for the better without sacrificing business goals:
“Our biggest contribution has not been the money we’ve given away,” Gellert recently told The New York Times. “It’s not individual issues that we’ve advocated for. It’s not scaling grassroots environmental activism through different levels of support. It’s operating from the bowels of business and proving that businesses can exist to do more than maximize the wealth of their owners, really consistently proving that in ways big and small over decades.”
That belief that companies can play a positive role in the world while growing the business—so-called “good growth”—is more than just feel-good purpose for brands and it certainly isn’t greenwashing. It is growth that is lasting, diversified, responsible to customers and better for the world.
Here are five principles to achieve good growth that meets new consumer expectations as well as the fast-moving needs of business:
The world is becoming more diverse—not just in ethnicity but in perspectives, experiences and voices. Marketers should tailor their messaging to a broader, more empowered and aware audience. Almost two-thirds of consumers want to buy from brands and companies with caring, ethical and transparent practices. They’re studying us just as hard as we’ve studied them.
How we acquire data is not just about methodology. It’s also about ethics and morality. We need to evolve our thinking from scale to precision and now to permission. What are we doing with data? How are we collecting it? Is it intrusive? Presumptuous?
Manage the consumer experience
A successful message needs more than just the message and the messenger. Unless we master the variables—UX, CRM—the consumer will not hear what we are saying or experience us the way they demand. Media or creative in and of themselves cannot deliver the goods if we’re not thinking about the holistic consumer experience and making it as easy and painless as possible for them to buy, shop share.
Personalize with purpose
With personalization, going micro ignores the macro and even something like hyper-personalization can be prohibitive. By focusing so acutely on identifying a consumer, we might miss consumers. Chasing such tightly defined personalization is preventing scale and bringing new consumers into the business. The same is true for measurement and optimization: Have we optimized ourselves into obsolescence, or are we experimenting and learning what really matters to consumers?
Stay connected to consumer expectations
Consumers are passionate but pragmatic. Most will pay a higher price for a product or service that speaks to their values but will want something in return. How brands pay that dividend will determine customer loyalty. Bear in mind that aligning to values can’t be knee-jerk reactions to news cycles or trending conversations. In a 24-second news cycle, events, attitudes and opinions can change instantly. Marrying yourself to one set of facts is a lifetime commitment in the age of Google. Brands need to balance their desire to speak with the realization what they know right now might be entirely different tomorrow or in the next hour.
If you think investors will simply continue to focus on bottom-line growth at the expense of all other considerations, consider the rise of ethical investment products and the importance of environmental, social and governance principles (ESG) as a barometer of a company’s future performance. Over the last five years, 50% of CPG growth came from products with sustainability claims, according to the NYU Stern School of Business. J.P. Morgan notes positive correlations between ESG indexes and financial performance. The market has already decided that this is good business; it is now the CMO’s job to deliver good growth.