Using Brands to Make Business Decisions

Note: This is the third article in a series on brand strategy from FrogDog. To begin from the beginning, click here.

Brand promises, values, and attributes are the lenses through which solid organizations view their world. In other words, they use their brand promises to

• determine what products and services they offer and how they offer them,
• find the right staff and partners and determine how to treat them, and
• make decisions about future company strategy and direction.

Heavy stuff.

But remember: Delivering on the brand’s promise is what makes a company successful and makes brands valuable. It’s critical to know what your company’s brand promise is (and in earlier articles we discussed how to define and create one), but it doesn’t matter how well you know it if you don’t stay true to it.

Let’s drill down on this a little more:

Day-to-Day Delivery: The Nordstrom Example

Companies use their brand promises every day to determine how they do business: the processes and procedures through which they provide their products and services to the world, the ways they hire and manage staff, and the firms and people they partner with outside their corporation to get the job done.

If the brand promise is what the company promises to the people who interact with it (see the first article in this series for a definition of “brand promise”), and successful brands deliver on their brand promises, then using it to determine how your company operates every day is critical to success.

Nordstrom is a classic example. The retail corporation’s brand promise is luxury and highly personalized, bend-over-backward customer service. Customer tales abound of Nordstrom employees sewing buttons on clothes purchased elsewhere and taking back garments—no questions asked—years after customers purchased them. People are so in love with Nordstrom and the Nordstrom experience that they drive hours to reach one and excitedly buzz well ahead of new Nordstrom stores opening in their areas.

How did they achieve this level of brand value? They crafted each aspect of the staff hiring and training program to instill the brand promise and empower their people to make decisions based upon it. Each Nordstrom employee has a business card, which he or she gives to customers, to encourage them to reach back directly if they need anything. No anonymous salespeople here!

In fact, Jim Collins and his research team (Collins is the author behind Built to Last and Good to Great) discovered that a company’s fulfillment of its brand promise was critical to long-term financial performance—and Nordstrom was one of the businesses they analyzed. In shareholder-value terms, Nordstrom’s historical adherence to its brand promise helped invested funds grow six times their original amount, while comparison companies that did not hold true to their brand promises and core ideologies yielded only two times the amount invested.

The Brand Promise and the Big Picture

On an even bigger scale, brand promises help companies determine what businesses, industries, and market segments to enter and how to enter them.

Take Virgin, for example. Virgin is in multiple business areas, including music, fitness centers, balloon flights, mobile phones, and travel. It’s an eclectic group, and reviewing the long list could make anyone wonder why the company chose such disparate business interests. Yet Virgin is smart: It only goes into a new area when it can find a “Virgin” way to do so. And the Virgin way is the company’s brand promise: “to be genuine, fun, contemporary, and different at everything we do at a reasonable price.” If Virgin can’t figure out how an opportunity is fun and different at a reasonable cost, or how something at a reasonable cost could be fun and contemporary, it passes.

Another example is Affinity Medical Group. The large medical partnership recently pondered how to deal with the national shortage of primary-care physicians. Affinity wanted to be true to its brand promise of “delivering personalized care to patients by listening, treating them with respect, and putting their needs and interests first,” so it chose to develop a “medical home” business model, which allows for a team-based approach to care and more time spent with each patient.

In the Affinity case, not only are patients happier, the overall cost of providing care has decreased for the practice—another example of how keeping the brand promise improves a company’s financial results.

Don’t let this seem daunting—or limiting. There is clarity and guidance in having a strong lens to focus your efforts when it comes to business decisions. It saves time deliberating options that, with a strong brand promise in place, aren’t really options at all.

This article is the third in a series by FrogDog about brand strategy. To begin from the beginning, click here. Our next article in the series discusses how companies can develop a strategy around their brands.

Or contact FrogDog to get started on your own brand strategy.