Mass advertising can help build brands, but authenticity is what makes them last. If people believe they share values with a brand, they will stay loyal to the brand.
Howard Schultz, CEO, Starbucks
If anyone knows how to build a brand, it’s Howard Schultz. From a single Starbucks location in 1987 to 21,366 Starbucks stores around the world in 2014, Schultz has managed to scale a business without losing sight of the values it was born from. A glance at the Starbucks mission statement shows their bigger goal: To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time. Not everyone agrees with their market dominance but they have become an essential brand to those aligned with their values. Values such as “Acting with courage, challenging the status quo and finding new ways to grow our company and each other”.
When Schultz returned to the company in 2008 after an eight year break, he did so because he believed that the company was losing it’s soul and losing sight of its values. To remedy this, he closed every single store worldwide for 3 hours to realign staff with their core mission and train all staff how to pour the perfect espresso. It was his belief that only by being the best in the world at what they do and staying true to their values could the company grow. He wasn’t wrong. That same year (2008), you could pick up a single share of Starbucks stock (SBUX) for the price of a venti macchiato at around $7. The stock closed yesterday at $94. A 1200% increase. That argument about values not having a financial value just went up in smoke, didn’t it?
Starbucks today remains true to the values it was founded upon. It offers healthcare plans to any employee, hourly or salaried, working more than 20 hours per week and at a shareholder meeting in 2013, Schultz dug in his heels about gay marriage after an investor complained that the company’s support was eroding its bottom line.
“If you feel respectfully that you can get a higher return [than] the 38% you got last year, it’s a free country,” said Schultz. “You could sell your shares at Starbucks and buy shares in other companies.”
It’s not just Schultz that understand the value of values – a study conducted by Millward Brown over 1o years of 50,000 brands found the same thing to be true: The study, which forms the backbone of GROW: How Ideals Power Growth and Profit at the World’s Greatest Companies, establishes a cause and effect relationship between a brand’s ability to serve a higher purpose and its financial performance. Notably, investment in these companies – the Stengel 50 – over the past decade would have been 400% more profitable than an investment in the S&P 500.
To further explore if and how ideals impact consumer attitudes, Millward Brown’s Neuroscience team devised a method to uncover the implicit associations that people make between brands and ideals. This custom research provided insights into the types of associations activated in people’s minds by the Stengel 50 brands and their competitors. The research uncovered the extent to which these high-growth brands touch on the five fields of fundamental human values identified in GROW:
- Eliciting Joy: Activating experiences of happiness, wonder, and limitless possibility
- Enabling Connection: Enhancing the ability of people to connect with each other and the world in meaningful ways
- Inspiring Exploration: Helping people explore new horizons and new experiences
- Evoking Pride: Giving people increased confidence, strength, security, and vitality
- Impacting Society: Affecting society broadly, from challenging the status quo to redefining categories
If you’re still building a company on your “How” and your “What”, it’s time to re-evaluate whether it’s in the best interests of your customers or your company to avoid aligning your ideals and world view with your customers well documented needs and buying behavior.
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