What Do You Stand For?
The concept of Values Based Positioning is gaining traction in our economy and I continue to be impressed by those companies and brands that have the guts to step up, say what they stand for and change their business models to live those values every day, sometimes at the risk of losing some customers.
The thinking behind Values Based Positioning is that when a company/brand stands for something (i.e.: the poor, minority rights, children’s health, etc.) that a core group of consumers will want to do business with these brands because they feel that company is aligned with their own values, and that they stand for more than simply making a profit.
I recently dined at the local Panera Bread café in Chicago’s Lakeview neighborhood near my office, this café was recently converted from a traditional Panera Bread café to the “Pay what you can” concept café called Panera Cares. This “Pay what you can” café concept is located in a neighborhood with million dollar townhomes and homeless people alike, meaning that there are customers who can help support the café and those who can benefit from a free meal.
“When you walk in, it’s the full Panera Bread experience,” says CEO Ron Shaich. “When you go into a soup kitchen, the energy is so negative and the food is institutional and the experience is institutional.” He said the idea for the community model was to “create an experience,” that could “lift people up” and provide some dignity for those who can’t afford to pay.
To make the concept work, consumers who have extra money are asked to donate it. Those who are short can pay less, and those who can’t pay anything can volunteer for an hour to eat free. Shaich said the idea has worked because Panera turns the stores over to the Panera Bread Foundation, a tax-exempt organization that runs day-to-day operations. This frees the publicly traded restaurant company of its obligation to run a profitable business. Oddly enough, all three of the current locations in Clayton, Mo.; Dearborn, Mich.; and Portland, Ore.; have turned a profit. Shaich said the foundation, of which he is also president, gives the money to social service organizations that provide job training for at-risk youth. Panera then hires those who have received the training.
What impressed me most is how the internal culture of the employees of the cafe is 100% invested in the purpose of the café. From the manager who greeted me when I walked into the café, who explained their new business approach, to the person at the
counter who explained how to order and where the “suggested donation” would be
deployed, everyone is on the same page. Panera Bread is teaching all of us, one sandwich at a time, that doing good is good business.
So how can a business that gives away some of its product, still remain profitable, you might ask? During the recession, Panera profited from a contrarian approach: focusing on the Americans who were still at work, focusing on quality and not slashing prices. Since then, it has posted industry leading sales growth. In 2011, Panera sales rose 18 percent, to $1.8 Bil.
Panera Bread saw a need in the communities it served and it leveraged its brand strength to fulfill that need. – So can you.