In a competitive market, with declining market share and a poor reputation, CVS had to re-imagine and re-position its brand.
— Steven Wolfe Pereira (@wolfepereira) October 20, 2016
After some serious soul-searching, CVS had the courage to stake its flag to a restated purpose: “Helping people on their path to better health.”
Sounds reasonable, but what does that really mean?
Known for its retail pharmacy outlets, CVS is an enormous company with inertia in brand perception and customer expectations.
It needed to change minds and that began with a new name and the shift from CVS Caremark to CVS Health.
But this newly purpose-driven brand went beyond words by acting on its vision and changing lives.
Not a small challenge for company with $153bn in 2015 revenue!
At the heart of this purpose-driven positioning was the big and very bold decision to stop selling cigarettes in all its US stores.
On October 1, 2014, CVS consciously, confidently and conspicuously lost $2bn of revenue to protect its customers from harm and align with its purpose to help people get healthier.
Giving up billions in revenue isn’t easy, and the decision took intense, board level negotiations.
But the team knew what it was doing and where CVS was going because the marketing strategy was also a business strategy.
When CVS ended tobacco sales, the attention wasn’t just a short-lived blip in the news cycle.
— MMC (@MMCtweets) October 20, 2016
The move resonated with customers and they rewarded the company with growth.
Today, CVS is number seven on the Fortune 500 list despite giving up that significant revenue stream and standing-up for a clear purpose.
The three key take-aways for brand marketers from CVS Health:
1. Stand up
Be a purpose-driven business only if you can live it and prove it in your actions, all of them needing to be relevant to your business.
In Norman’s words “deeds matter more than creeds.”
2. Stand out
Find a unique way to say who you are and what you’re doing, find an identifiable voice identifiable at a glance and from a distance.
3. Stand firm
Being purpose-driven is not just a marketing strategy.
That purpose is fundamental to strategy, and should drive product, operations, HR and everything else.
For example, CVS stopped selling sunscreen with an SPF less than 15 because it has been proven to not work.
If you stand up, stand firm and stand out your customers will stand with you.
For more on this topic, see Econsultancy’s report on Embracing Digital Transformation in the Pharma and Healthcare Sectors.