In a fast-moving world, where tastes and trends can evolve in days and fade in moments, it can be hard for businesses to keep pace. Consumers are fickle and even well-known brands can lose their appeal, often without fully understanding why. Yet some companies
manage to stay constantly ahead of their peers, retaining the respect, and even love, of their customers. Their products are in demand, their management are revered and their performance is consistently strong. How do they do it ?

MANAGEMENT

Above and beyond

Above

and

beyond

In a fast-moving world, where tastes and trends can evolve in days and fade in moments, it can be hard for businesses to keep pace. Consumers are fickle and even well-known brands can lose their appeal, often without fully understanding why. Yet some companies manage to stay constantly ahead of their peers, retaining the respect, and even love, of their customers. Their products are in demand, their management are revered and their performance is consistently strong. How do they do it ?

For many companies, delivering consistent growth in sales and earnings is their ultimate endgame. Some, however, aim higher. They strive to attain the status of ‘national treasure’.

To achieve this, a brand needs to be so much a part of a shared culture that it basks in the rays of a collective romantic nationalism. Mentioning its name evokes a fondness among its customers and revenues soar while the going is good. 

“To become a national treasure brand requires two things,” says Rita Clifton, chair of specialist consultancy BrandCap. “You have to be loved and respected. There can’t be one without the other.” 

Tainted love

Few businesses can expect to reach this hallowed state and it can be a terrible burden, a veritable poisoned chalice. Any stumbles are hugely visible, as many a company has found out to its cost. 

Take Marks & Spencer. Once loved and respected, its products transcended class and distance for nearly a century and, in 1998, it became the first British retailer to produce a profit of more than £1 billion. But its decline was vertiginous – by 2001, the shares had tanked by two-thirds and profits had crashed to a mere  £145 million. Last year, M&S made a net profit of £117 million on a margin of 1.71 per cent. The respect has gone. The love affair is over. 

Some might say that M&S is stuck in the middle market. But John Lewis covers the same territory and it is in a rather better position. The UK chain store had a rough 2017, but it is widely perceived to excel at the ‘trust’ thing, probably the most vital component of being a treasured brand.  

 

 MANAGEMENT
Putting trust first

That is no coincidence, as chairman Charlie Mayfield puts trust at the heart of the business. “I think trust means three things. First, act in the customer’s interests. Second, make sure you always do as you say you will. And third, if something goes wrong, admit it and then deal with the problem,” he says. 

This combination of honesty, integrity and transparency is no bad yardstick. “You get a ‘trust deficit’ when an inherent conflict arises between the making of profit and the interests of the consumer,” says Mayfield. “At the extreme, these two can be in opposition. So maximisation of profit is not our goal. We aim to make sufficient profit.”

Few retailers are willing to state that maximisation of profit is not high among their key performance indicators. But it seems to help the John Lewis brand. And it may work for others, too, perhaps more so today than ever. As PR guru Richard Edelman, founder of the Edelman Trust Barometer, explains: “You need to take consumers through the door of reassurance before you can sell to them.”

The ‘door of reassurance’ is a complex concept – a blend of delivering on promises, doing the right thing and plain dealing. A prerequisite for treasured brands, it assumes impeccable governance and a thoroughly virtuous existence.

All-conquering algorithms 

Yet technology has shaken up many of these maxims. 

Amazon, for instance, is no one’s national treasure, but that is part of its extraordinary success – it transcends borders. Although it is very close to its customers – frighteningly close when it comes to intimate knowledge of their behaviour – this is no warm, intimate closeness. Its success comes from all-conquering algorithms and vast warehouses, sometimes described as the modern equivalent of Victorian workhouses. Amazon’s profits for its entire existence are still less than ExxonMobil’s takings every two-and-a-half weeks, so maximisation of profit is not an overarching goal right now. But the company is still a global phenomenon. 

And here we approach the crux of the problem. Amazon is not just another brand. It created a new paradigm and is a brand destroyer. People will still pay a premium for a product if the brand equity is sufficiently high. But Amazon is sucking away at brand margins, making it hard for even treasured companies to charge a premium.   

The right stuff

Apple is one of the rare examples of a tech company that manages to make serious profits, remain at the cutting edge of innovation and scale the heights of love and respect among consumers. Those who own iPhones or iPads would feel at a total loss without them. Even the iWatch outsold the entire Swiss watch industry – with its centuries of brand equity – in 2017. Apple’s products have become almost bodily extensions. But Apple is a luxury brand – the world’s most successful. It travelled abroad with such alacrity because its customers are frequently wealthy or aspiring to be so. They want the same things, and Apple understands them.

Apple also understands how to create, build and nurture its treasured status. Steve Jobs wrote the book here – what one might term ‘The Book of Jobs’ – based around a fiercely-guarded, rigorously-controlled brand. It is no surprise that, at the heart of a national treasure, you will often find an obsessive. 

Apple's core

Jobs could even be described as messianic in his zeal, and once said: “What we’re about isn’t making boxes for people to get their jobs done, although we do that well. We do that better than almost anybody in some cases. But Apple’s about something more than that: Apple, at the core, its core value, is that we believe that people with passion can change the world for the better. That’s what we believe.”

Apple is more than a national treasure, it is a global treasure. And, like many extraordinarily successful businesses, it is backed by a comprehensive and strictly observed book of rules, a ‘bible’. Nothing that is offered can be inauthentic or sub-par. All disciples must understand and submit to this. 

To create a true national or global treasure, the meaning of the word ‘iconic’ must be understood, too. Not for nothing does the word ‘icon’ cross from religion to business to religion and back again. That we use it to discuss everyday goods serves to emphasise the ritual element in consumer behaviour. An ikon is the Greek word for a static visual image. But ‘iconic’ has now evolved to mean something that is either well recognised or revered, or has some synoptic power to suggest a larger value system. 

Hot property

The British advertising veteran Sir John Hegarty once said: “A brand is the most valuable piece of real estate in the world – a corner of someone’s mind.” National treasures reside in the minds of multitudes. 

It is perhaps significant, too, that Apple makes physical things. Jobs said his products must be so desirable that you want to lick them. That may make them less subject to the whims, transience and ravages of the purely digital world. And the company is vertically integrated, leaving far less margin for error. It controls the process of bringing goods to market from the drawing board to the legendary Apple stores, which have become places of 21st Century worship.  

Saintly Scandinavians

Jobs had almost boundless drive and ambition – and he succeeded. Lesser mortals, however, may find it a good deal harder to create a true national treasure.  

They have had a pretty good crack at it in Scandinavia, though. Just think of IKEA and Lego, which, like Apple, have virtually achieved global treasure status. But they can slip up, as Lego found out when it refused to sell its bricks in bulk to Chinese artist and activist Ai Weiwei in 2015.  

After Lego’s initial refusal, Ai retaliated by reposting the company’s letter on social media with a photo of a toilet bowl clogged with the toy bricks. He described the Danish company’s refusal to sell its product as “an act of censorship and discrimination”. What happened next is instructive. Kjeld Kirk Kristiansen, the founder’s grandson, quickly described the decision as: “An internal mistake, made by a very low-level employee.”

Be good

Kristiansen followed the approach advocated by Mayfield at John Lewis: if something goes wrong, admit it and deal with the issue. And it worked. ‘Doing the right thing’ is part and parcel of being a treasured brand.  

BrandCap’s Clifton points out that brand equity is more vulnerable than ever these days. “Truth hits you much faster in the digital age,” she says. “Within hours you can be hit by a Twitter storm or bad news on Glassdoor [the website where employees can anonymously review firms and their management]. Any brand frailty is punished mercilessly and brutally. There is no place to hide.”  

The world of social media can indeed be unforgiving. In February, US reality TV star Kylie Jenner posted a single tweet to her 24 million followers: “sooo does anyone else not open Snapchat anymore? Or is it just me”. Shares of the app’s parent company, Snap, fell 6 per cent in response – a $1.3 billion drop in market value that launched a fresh cycle of embarrassing headlines. “We’re watching a company explode to bits,” said one Silicon Valley observer. “This is far more than a one-day PR snafu.”

Marks and Spencer was founded in 1884. Snapchat was born in 2011. Retaining treasured status may seem tougher than ever. But those who succeed still share the same key traits: an obsession with quality, an obsession with service and an obsession with customer understanding 

Back to articles

Amazon is no one’s national treasure, but that is part of its extraordinary success – it transcends borders”​

To become a national treasure brand requires two things. You have to be loved and respected. There can’t be one without the other”​

For many companies, delivering consistent growth in sales and earnings is their ultimate endgame. Some, however, aim higher. They strive to attain the status of ‘national treasure’.

To achieve this, a brand needs to be so much a part of a shared culture that it basks in the rays of a collective romantic nationalism. Mentioning its name evokes a fondness among its customers and revenues soar while the going is good. 

“To become a national treasure brand requires two things,” says Rita Clifton, chair of specialist consultancy BrandCap. “You have to be loved and respected. There can’t be one without the other.” 

Tainted love

Few businesses can expect to reach this hallowed state and it can be a terrible burden, a veritable poisoned chalice. Any stumbles are hugely visible, as many a company has found out to its cost. 

Take Marks & Spencer. Once loved and respected, its products transcended class and distance for nearly a century and, in 1998, it became the first British retailer to produce a profit of more than £1 billion. But its decline was vertiginous – by 2001, the shares had tanked by two-thirds and profits had crashed to a mere  £145 million. Last year, M&S made a net profit of £117 million on a margin of 1.71 per cent. The respect has gone. The love affair is over. 

Some might say that M&S is stuck in the middle market. But John Lewis covers the same territory and it is in a rather better position. The UK chain store had a rough 2017, but it is widely perceived to excel at the ‘trust’ thing, probably the most vital component of being a treasured brand.  

A brand is the most valuable piece of real estate in the world – a corner of someone’s mind”​

To become a national treasure brand requires two things. You have to be loved and respected. There can’t be one without the other”​

Putting trust first

That is no coincidence, as chairman Charlie Mayfield puts trust at the heart of the business. “I think trust means three things. First, act in the customer’s interests. Second, make sure you always do as you say you will. And third, if something goes wrong, admit it and then deal with the problem,” he says. 

This combination of honesty, integrity and transparency is no bad yardstick. “You get a ‘trust deficit’ when an inherent conflict arises between the making of profit and the interests of the consumer,” says Mayfield. “At the extreme, these two can be in opposition. So maximisation of profit is not our goal. We aim to make sufficient profit.”

Few retailers are willing to state that maximisation of profit is not high among their key performance indicators. But it seems to help the John Lewis brand. And it may work for others, too, perhaps more so today than ever. As PR guru Richard Edelman, founder of the Edelman Trust Barometer, explains: “You need to take consumers through the door of reassurance before you can sell to them.”

The ‘door of reassurance’ is a complex concept – a blend of delivering on promises, doing the right thing and plain dealing. A prerequisite for treasured brands, it assumes impeccable governance and a thoroughly virtuous existence.

Amazon is no one’s national treasure, but that is part of its extraordinary success – it transcends borders”​

All-conquering algorithms 

Yet technology has shaken up many of these maxims. 

Amazon, for instance, is no one’s national treasure, but that is part of its extraordinary success – it transcends borders. Although it is very close to its customers – frighteningly close when it comes to intimate knowledge of their behaviour – this is no warm, intimate closeness. Its success comes from all-conquering algorithms and vast warehouses, sometimes described as the modern equivalent of Victorian workhouses. Amazon’s profits for its entire existence are still less than ExxonMobil’s takings every two-and-a-half weeks, so maximisation of profit is not an overarching goal right now. But the company is still a global phenomenon. 

And here we approach the crux of the problem. Amazon is not just another brand. It created a new paradigm and is a brand destroyer. People will still pay a premium for a product if the brand equity is sufficiently high. But Amazon is sucking away at brand margins, making it hard for even treasured companies to charge a premium.   

The right stuff

Apple is one of the rare examples of a tech company that manages to make serious profits, remain at the cutting edge of innovation and scale the heights of love and respect among consumers. Those who own iPhones or iPads would feel at a total loss without them. Even the iWatch outsold the entire Swiss watch industry – with its centuries of brand equity – in 2017. Apple’s products have become almost bodily extensions. But Apple is a luxury brand – the world’s most successful. It travelled abroad with such alacrity because its customers are frequently wealthy or aspiring to be so. They want the same things, and Apple understands them.

Apple also understands how to create, build and nurture its treasured status. Steve Jobs wrote the book here – what one might term ‘The Book of Jobs’ – based around a fiercely-guarded, rigorously-controlled brand. It is no surprise that, at the heart of a national treasure, you will often find an obsessive. 

Steve Jobs said his products must be so desirable you want to lick them”​​

Steve Jobs said his products must be so desirable you want to lick them”​

Apple's core

Jobs could even be described as messianic in his zeal, and once said: “What we’re about isn’t making boxes for people to get their jobs done, although we do that well. We do that better than almost anybody in some cases. But Apple’s about something more than that: Apple, at the core, its core value, is that we believe that people with passion can change the world for the better. That’s what we believe.”

Apple is more than a national treasure, it is a global treasure. And, like many extraordinarily successful businesses, it is backed by a comprehensive and strictly observed book of rules, a ‘bible’. Nothing that is offered can be inauthentic or sub-par. All disciples must understand and submit to this. 

To create a true national or global treasure, the meaning of the word ‘iconic’ must be understood, too. Not for nothing does the word ‘icon’ cross from religion to business to religion and back again. That we use it to discuss everyday goods serves to emphasise the ritual element in consumer behaviour. An ikon is the Greek word for a static visual image. But ‘iconic’ has now evolved to mean something that is either well recognised or revered, or has some synoptic power to suggest a larger value system. 

Hot property

The British advertising veteran Sir John Hegarty once said: “A brand is the most valuable piece of real estate in the world – a corner of someone’s mind.” National treasures reside in the minds of multitudes. 

It is perhaps significant, too, that Apple makes physical things. Jobs said his products must be so desirable that you want to lick them. That may make them less subject to the whims, transience and ravages of the purely digital world. And the company is vertically integrated, leaving far less margin for error. It controls the process of bringing goods to market from the drawing board to the legendary Apple stores, which have become places of 21st Century worship.  

A brand is the most valuable piece of real estate in the world – a corner of someone’s mind”​​

Saintly Scandinavians

Jobs had almost boundless drive and ambition – and he succeeded. Lesser mortals, however, may find it a good deal harder to create a true national treasure.  

They have had a pretty good crack at it in Scandinavia, though. Just think of IKEA and Lego, which, like Apple, have virtually achieved global treasure status. But they can slip up, as Lego found out when it refused to sell its bricks in bulk to Chinese artist and activist Ai Weiwei in 2015.  

After Lego’s initial refusal, Ai retaliated by reposting the company’s letter on social media with a photo of a toilet bowl clogged with the toy bricks. He described the Danish company’s refusal to sell its product as “an act of censorship and discrimination”. What happened next is instructive. Kjeld Kirk Kristiansen, the founder’s grandson, quickly described the decision as: “An internal mistake, made by a very low-level employee.”

Be good

Kristiansen followed the approach advocated by Mayfield at John Lewis: if something goes wrong, admit it and deal with the issue. And it worked. ‘Doing the right thing’ is part and parcel of being a treasured brand.  

BrandCap’s Clifton points out that brand equity is more vulnerable than ever these days. “Truth hits you much faster in the digital age,” she says. “Within hours you can be hit by a Twitter storm or bad news on Glassdoor [the website where employees can anonymously review firms and their management]. Any brand frailty is punished mercilessly and brutally. There is no place to hide.”  

The world of social media can indeed be unforgiving. In February, US reality TV star Kylie Jenner posted a single tweet to her 24 million followers: “sooo does anyone else not open Snapchat anymore? Or is it just me”. Shares of the app’s parent company, Snap, fell 6 per cent in response – a $1.3 billion drop in market value that launched a fresh cycle of embarrassing headlines. “We’re watching a company explode to bits,” said one Silicon Valley observer. “This is far more than a one-day PR snafu.”

Marks and Spencer was founded in 1884. Snapchat was born in 2011. Retaining treasured status may seem tougher than ever. But those who succeed still share the same key traits: an obsession with quality, an obsession with service and an obsession with customer understanding 

Back to articles

Browse all articles
Bridgepoint  |  The Point  |  November 2018  |  Issue 34