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posted by Kevin Smith Oct 28,2015 @ 08:00AM

How We Spend Money

1920s: We outspent ourselves.

1930s: Then we spent nothing.

1940s: We spent only when necessary.

1950s - 1980s: After that, we spent as instructed.

1990s - 2008: We outspent ourselves -- again.

2008 -  2010: Then we spent nothing.

It may have been a cycle, but it isn’t anymore. It’s not that “this time is different.” Every time has been different to a degree. I don’t believe we are in the midst of a modest recovery that will ultimately culminate in another glory decade or two.

I believe the next phase is: “We started caring how we spent.”

The number of brands connected to causes or giving back or being more sustainable is growing by the minute. That’s a trend. I hope it continues. But there is a broader and likely more permanent business context.

Companies that articulate and demonstrate a clear purpose are succeeding. Some might be charitable in nature, but this is not a prerequisite. Given pervasive marketing, given that we are all time-starved and attention-impaired, consumers are choosing to spend money with companies that demonstrate clarity.

Kick Starter announced last week that it will not sell or go public – ever. They are committed to helping fund creative projects, and see reporting to shareholders as a potential distraction to that end. Southwest has held true to its mission of democratizing the air, and stands by the slogan: “bags fly free.” Meanwhile, CVS made the decision to focus on its customers’ health and stop selling tobacco products. As I write this, several of our local network affiliates are providing uninterrupted coverage of Columbia’s tragic flood. They’ve decided to focus on their primary purpose as an affiliate – reporting local news.

This is not marketing, but purpose-based decision making. This is leadership. Clear business decisions driven by a company’s mission and core values. These decisions may at first seem counter intuitive, but they provide clarity both internally and externally. The outcome is loyalty and profit.

Our marketplace has never been more crowded and communication channels have never been more fragmented. Most marketing programs have become a scattershot of tactics. In this environment, purpose and the clarity it yields brings customers in the door and keeps them coming back.

A recent Gallup poll found that only 28 percent of employees strongly agree with the statement "I know what my company stands for and what makes our brand(s) different from our competitors." The same poll found that when customers can see alignment between a company’s purpose and its behavior, they give it twice the share of wallet.

Given this dynamic, I am shocked at how few companies have a clear sense of purpose. Mission statements and core values abound, but they are most often anything substantive. If one of your company’s core values includes integrity, this most likely includes you. Basic honesty is not a core value. Being “best in class” or “providing excellence” is not a mission. A committee of employees assigned to work on the mission statement typically leads to general platitudes on which everyone can agree. Unfortunately, committees rarely offer organizational clarity or existential intent.

Ask instead: Why were we created? What would be lost if we were gone? You and your coworkers have to know why you show up each day, beyond making money. In doing so, I believe you’ll make a whole lot more of it. 

Topics: Perspectives, Social Consciousness

 

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