œPurpose

Ashok Vaswani, CEO of Barclays Bank's retail and business banking, emphasizes that every business needs a social purpose, not just a focus on money. Why? Because today's consumers want more than just profit-driven companies. They want businesses that care about making a positive impact.

Purpose isn't just a nice idea; it's crucial for success. Companies without a clear purpose will struggle to attract customers, recruit talent, make profits, maintain value, and stay around for the long haul.

According to Mitch Markson, the chief creative officer at Edelman, purpose has become a key factor in marketing. It's now considered the "fifth P" alongside product, price, place, and promotion.

Why Businesses Exist

In today's world, businesses must ask themselves a fundamental question: Why do we exist? It's no longer just about making money; it's about understanding our purpose and how we contribute to society.

Simon Sinek, a leadership consultant, explains in a popular TedX talk that œpeople are not just interested in what a company does, but why it does it. He argues that having a clear purpose drives not only profits but also a deeper meaning and impact. CEOs face a dual challenge. They must pursue a "purpose beyond profit," focusing on a greater societal contribution, while also ensuring a satisfying œcustomer experience (CX). In today's market, customers are willing to pay more for an experience that goes beyond just buying a product or service.

Do right

Organizations that operate with purpose follow three key principles:

1. "Stand up" to offer value to customers.

2. "Stand out" by providing an excellent customer experience through all channels to differentiate themselves from competitors.

3. "Stand firm" by building a strong, sustainable culture that consistently delivers satisfying customer experiences in the long run.

Corporate culture with purpose.

To succeed, purposeful organizations need leaders who understand the importance of purpose. They also need an innovative and dynamic corporate culture to create positive experiences for both customers and employees. Within these cultures, purpose is expressed in three ways:

1. œCommercial purpose - This means the company must be successful in making profits and achieving its financial goals.

2. œBrand purpose- To satisfy customers, it's important to know who they are and what matters most to them. Being "customer-driven" means keeping the promises made to customers, known as the "brand promise."

3. œSocial purpose - This involves defining how your organization contributes to society, and outlining its societal vision.

By focusing on these three aspects of purpose, organizations can create a strong foundation for success.

Client Experience

Companies focused on their purpose use a seven-step strategy for customer experience (CX). This helps them create memorable customer interactions and stand out from competitors. The steps are:

• "Engage": To improve customer experience, get your employees' support. Imagine if each customer bought one more item, stayed one more day, or referred one more person. Detail the experience that will achieve this and outline the steps to make it happen.
• "Guide insight": Research the values that build customer loyalty. Identify your most profitable customers and target their key interactions. Use focus groups to understand their loyalty drivers.
• "Define": A strong brand promise sets your brand apart and tells customers what to expect. Ensure all departments understand and support your brand promise.
• "Design": Plan every aspect of the experience you want to offer. Create positive responses to each interaction.
• "Align": Internal conflicts can slow your efforts to improve customer experience. Assign cross-functional ownership of customer initiatives to align units and employees. Get support from your board.
• "Measure": Successful companies rigorously assess the experiences they create. Use processes to measure customer loyalty and advocacy, which are leading indicators of success. Develop an integrated scorecard to monitor financial and customer experience metrics.
• "Innovate": Keep customers engaged by innovating their experience. Involve customers and employees in developing your brand. Use social media to engage them through a social network.

Case Study 1: citizenM

The citizenM hotel chain offers œaffordable luxury stays in cities like Rotterdam, London, New York, Paris, and Glasgow. They cater to a specific group of business travelers known as "mobile citizens," who often struggle to find suitable accommodations within their company's budget. These travelers dislike bland and budget hotels, often opting for unsafe or inconvenient alternatives. 

To address this, citizen M's founder, Rattan Chadha, created a hybrid option that combines prestige with affordability. The focus is on providing stylish and well-designed hotels with facilities tailored to the needs of mobile travelers. Guest satisfaction is their top priority, reflected in the name "citizen," which stands for "mobile citizens."

Chadha's Research for Affordable Luxury: Chadha researched extensively to offer upscale experiences at reasonable prices. By making smart trade-offs and cutting unnecessary frills, he established a chain of chic, upscale yet affordable hotels.

Focus on Essential Comfort: Understanding that most business travelers only use their rooms for sleeping, Chadha invested in comfortable, inviting lobbies. These lobbies serve as a "living workspace," as citizen M's marketing asks, "Why pay for bits of a hotel you don't need?"

Homey Lobbies for Guest Comfort: The lobbies offer tables, computers, TVs, fireplaces, and books to create a homely atmosphere. CitizenM encourages guests to use the books, and the chain doesn't mind if a book or two goes missing. Chadha believes that taking books home will remind guests of citizens and encourage them to return.

The Importance of Focus: Chadha emphasizes the importance of doing one thing right. Francisco Sordo, manager of citizenM's Amsterdam hotels, echoes this sentiment, emphasizing the company's focus on guest satisfaction. He recognizes the importance of steady profits but understands that unhappy guests won't return, and no hotel chain can sustain profits without loyal guests.

Case Study 2: Innocent Foods

Innocent Foods aims to get œawesome food and drinks to as many people and places as possible. But when Coca-Cola Corporation (CCC) bought it, people wondered if Innocent sold out. Did this small, funky brand lose its essence to the soft-drink giant? Would its customers think so?

Richard Reed, co-founder of Innocent Foods, insists that teaming up with CCC doesn't mean betraying their mission. Joining forces with the food-and-drink empire lets the small company and its West London factory tap into Coca-Cola's huge distribution network. Innocent Foods' boss knows that having a big corporate parent means they can reach more folks and keep doing what they love on a grand scale.

Enhance Customer Experiences

In their 1999 book, The Experience Economy, Joseph Pine and James Gilmore predicted that consumers would demand unique experiences, not just products or services. Starbucks is an example of a company meeting this demand. Its CEO, Howard Schultz, sees Starbucks as a "third place" for people, a special spot between home and work where customers can relax. It's a special place where people can œhang out, creating a third space between home and work. Similarly, Chadha aims to turn citizens  into the "Starbucks of hotels."

œSeven Deadly Sins

œSeven Deadly Sins of Customer Experience:

1. "Lip-service leadership" - Leaders need to be clear about their goals. Instead of blaming employees when things go wrong, they should lead by example and inspire their teams.

2. "Silo thinking" - Companies often split their customer service into different departments, which can lead to a disjointed experience. It's better to align all departments to provide a unified service.

3. "Assuming all customers are equal" - Many companies don't know who their most valuable customers are. It's important to identify these customers and understand their needs.

4. "Assuming all touchpoints are equal" - Every interaction with a customer is unique and has its value. Focus on improving the most important touchpoints for your customers.

5. "Thinking training is the answer" - While training is important, hiring the right people is equally crucial.

6. "Putting technology in charge" - Some companies invest in customer relationship management (CRM) systems without a clear strategy, which can drive customers away. It's important to use technology wisely.

7. "Measuring satisfaction rather than experience" - While metrics like market share and profitability are important, customer advocacy is the most valuable measurement of a positive customer experience.

Focused leaders

To build a company with a clear œpurpose, you need leaders who are committed and proactive. These leaders should champion the organization's mission and values, making decisions that prioritize both providing excellent customer service and contributing positively to society. By leading by example, purposeful leaders demonstrate the importance of their company's values to their employees. In short, as the leader of a purpose-driven company, your actions set the tone for your team to follow.