Why is it that customers are willing to fork out huge amounts on small items such as a handbag or pair of shoes, purely because of the brand? Because we buy into what brands stand for and what they represent, even though we often can get the same item from a fraction of the price elsewhere.

Brand is important.

Sure, our loyalty to brands is not what it once was, but that’s because if something happens with a brand that we don’t agree or identify with, we’ll drop that brand in the matter of seconds. Plus, our options are endless. Brands that see strong loyalty with their customers today have managed to create a cult-like following by differentiating themselves – often by taking having a strong point of view.

So, a brand needs to stand for something and at the same time be differentiated from everyone else in order to gain and maintain that loyalty with the customer.

Differentiation is a concept that is crucial for businesses to consider in their strategy, especially in the retail industry, in order to survive in a world where your customer can fire you simply by choosing to shop elsewhere.

So, how do you differentiate your brand?

In our last module we talked about what innovation is as well as the importance of it in order for businesses to survive and thrive (when done right). And while this is important, you have to have a strategic direction, a point of differentiation for your brand, in place before considering taking your business to the next level.

The old brand model

The old brand model speaks from the outside in; it starts with features and benefits of the product to the customer (value proposition), then the brand’s competitive positioning and why the customer should choose them (positioning statement). The problem is that this model presumes you do what you’ve always done, which is limiting in terms of future product or service expansions – or new innovations. Plus, these layers tend to sit in marketing, and not apply to the rest of the business. It doesn’t speak to emotions and is not exciting, it speaks to the rationale. Humans make decisions based on emotional shortcuts, not rational thinking – that comes after purchase (post-rationalisation). So what Simon Sinek did was to flip the model to start with why the business exists.

The Golden Circle / The Brand Purpose Wheel

“Start with the Why” or (The Golden Circle) was born over 10 years ago when Simon Sinek, author, motivational speaker and organisational consultant, went through a rough patch in his life of being unmotivated and therefore unhappy. After deciding to face his problems to try and get back to the passionate state in which he started his company, he realised that he (and every other company in the world) knows what they do, and some know how they do it. But seemingly few (including himself and his company) knew why they do what they do, beyond making money.

The Golden Circle / Brand Purpose Wheel

Once he found his “why”, he was able to motivate himself and his employees beyond all expectations. Because as he says:


So, what you need to ask yourself is “beyond making money, why do we exist?”

It’s important to note that brand purpose is not just an internal business tool, it should apply to everything to do with the business; product/service, place, promotion, price, presentation, processes and people. Your purpose provides the foundation on which to build everything else; the how and what.

“The goal is not to do business with everybody who need what you have, the goal is to do business with people who believe what you believe.”

And people are particularly important. To quote Simon Sinek again:

the goal is not to hire people who need a job, it’s to hire people who believe what you believe.

Another good quote from Elon Musk, founder of Tesla:


Your employees are your most important asset because at the end of the day they’re the ones that face the customer and represent the brand and what it stands for. If they believe, live and breathe your purpose, it becomes a ripple effect that creates a sense of belonging and loyalty with the customer. They buy why you do what you do.

How do you identify your brand purpose?

A company’s brand purpose should be a combination of input from two key areas; what the consumer values (consumer insight) and what the brand offers (brand insight):

Consumer insight

Firstly, it’s important that you’re targeting the right customer for your brand. If you don’t do this the rest won’t matter and you’ll get nowhere.

Secondly, an important lesson we’ve written about previously is that if you’re not customer-centric, you will fail to secure growth in the future. And to build out a brand purpose you have to know what your customer wants and what they value. How do you identify their wants and needs? Just talk to them. If you ask the right questions you will get the right answers, which in return will create a pattern of key trends and movements in that category.

Brand insight

What does the brand have to offer? Is it aligned with what our target customers wants? How do our customers see our brand?

And from there you build out a short, yet powerful and to the point statement that reflects the purpose that answers why your business exists. It often refers to the history of your brand or the motivation behind starting the business (beyond making money).

Who does brand purpose well?

  •  Tesla:
    • Why: To accelerate the transition to sustainable transportation
    • How: By creating a culture of technology, design and innovation fuelled by an ambition to move the world away from polluting fossil fuels
    • What: Electrical cars as well as the entire infrastructure to support them
  • LUSH
    • Why: We believe in speaking up
    • How: by raising societal issues, such as fighting animal testing and ethical buying
    • What: Fresh Handmade Cosmetics
  • Apple:
    • Why: To challenge status quo
    • How: Beautifully designed, simple to use and user-friendly products
    • What: Consumer electronics and software
  • Amazon:
    • Why: Being the Earth’s most customer-centric company
    • How: Customer obsession, eagerness to invent and pioneer, willingness to fail, patience to think long-term, and operational excellence
    • What: Electronic e-commerce

Once you have found your purpose, it is also important to take a look at how you do things. We tend to look at this by using a few tools, like brand archetypes and brand values. We’ll be exploring this in the next few weeks.

P.S: if you’re interested in joining our private Facebook group for small to medium businesses where we’re sharing articles and resources around different themes in retail, hit us up here.