Monday, March 4, 2024

What is the Golden Circle in Marketing?

The golden circle is a powerful concept introduced by Simon Sinek that shifts how brands think, act and communicate. It suggests that inspirational organizations and leaders start from their inner purpose or beliefs before determining how to bring that purpose to life and what products or services to offer.

The golden circle flips traditional marketing on its head by putting “why” before “how” and “what.” Most brands focus on touting features and benefits of what they sell. But successful movements and brands lead with their purpose and connect on a deeper human level.

Understanding Simon Sinek’s Golden Circle Model

Simon Sinek first shared the idea of the golden circle in his influential 2009 book “Start With Why” and related TED talk. He noticed that the most influential leaders and organizations tend to operate in the opposite way than most brands.

Instead of starting with what they offer or how they do it, inspiring leaders start with why. They first define their higher purpose, cause or belief. This why provides guidance on how to bring that purpose to life, which then informs what products or services would be a natural fit.

On the other hand, average companies and brands start with what they do – their products, services, features and benefits. Sometimes they focus on how they do it or their “unique selling proposition.” But very few effectively communicate why they do what they do. Their marketing misses the core emotional drive and ideology.

Sinek illustrated this idea by drawing three concentric circles, moving from the inner motivation (why) to the process (how) to the tangible things offered (what). This simple but profound concept has influenced marketing and leadership thinking over the past decade.

The Three Layers of the Golden Circle

The golden circle has three layers, starting with the core purpose or belief and moving out to concrete things created.

Inner Circle – Why

This represents an organization or brand’s purpose, cause or passion. Why does your company exist? What is your driving ideology or belief? What principles or mission guide your work beyond profit?

Apple provides a classic example. Their why is challenging the status quo and empowering rebels, dreamers and misfits who “think different.” This fuels their unconventional approach to technology and brand.

Patagonia’s why involves protecting the environment. Airbnb’s is around fostering belonging. Identifying your authentic why requires self-examination and reflection on motivations.

Middle Circle – How

The middle circle describes how a brand fulfills its inner purpose. What are the concrete strategies, processes, and actions used to bring the why to life? How does the business embody its beliefs on a tactical level?

For Apple, this includes a focus on simplicity, design-centric thinking, user friendliness and customer experience. Patagonia’s how involves sustainable practices, activism and corporate responsibility. Airbnb’s how means building a trusted community marketplace.

Outer Circle – What

The outermost circle refers to the tangible products and services a business offers to customers and the market. For Apple this includes Macbooks, iPhones, iPads and more. Patagonia sells outdoor apparel and gear. Airbnb operates an app and website that connects travelers to hosts’ homes.

The what reflects how a brand’s why and how translate into functional, real-world offers. But the golden circle stresses leading with and making decisions based on the inner two circles.

Applying the Golden Circle to Marketing

The golden circle framework holds important implications for marketing, brand building and business success:

Focus on Purpose, Not Product

Effective marketing requires highlighting the meaningful cause or ideology behind what you do, not just communicating functional product benefits. Leading with why connects on a deeper cultural and emotional level. It builds relationships beyond transactions.

As Simon Sinek notes, people don’t buy what you do, they buy why you do it. Your why is the purpose, belief or passion that stirs action from both employees and customers.

Build Trust Through Shared Values

Leading with why allows you to frame your brand identity and products around a shared set of beliefs and values. You can market in a more authentic way that resonates with your audience and builds trust.

Shared values form the basis for tribes and movements. Based on polls, people are 4x more likely to buy from brands that stand for what they believe in.

Inspire Loyal Customers

Focusing on purpose taps into deeper human motivations for those you want to reach. Inspiration comes from emotional connection and a jointly held ideology, not just great features.

When you sell why you exist beyond profits, you ignite passion in others to take action. Loyal brand followers want to align with companies that stand for more than transactions.

Examples of the Golden Circle in Action

Some powerful examples of the golden circle ethos include:

Tesla

Why – Accelerating sustainable transport and energy use for environmental good.

How – Creating beautiful and advanced long-range electric vehicles powered by the sun.

What – Sleek, high-performance electric cars like Model S, 3, X and more.

TOMS Shoes

Why – Helping provide shoes to children in need across the world.

How – Selling shoes and eyewear online and in retail stores in a one-for-one donation model.

What – Trendy shoes, sunglasses and other accessories.

Starbucks

Why – Fostering human connection and community through coffeehouses.

How – Creating welcoming third spaces for quality coffee experiences.

What – Coffee shops selling specialty drinks, food and more.

In each case, the company leads with purpose and lets it guide strategies and offers. Their whys reflect deeper motivations than profit.

Tips for Implementing the Golden Circle

Here are some tips for structuring your marketing and brand identity around a golden circle ethos:

Identify Your Core Purpose

Take time to identify your organization’s true purpose and reason for being beyond making money. Analyze what really motivates you. Find that authentic meaningful mission tied to emotions and values.

Communicate From the Inside Out

When marketing, lead with your why and how before ever discussing products and services. Highlight purpose and process first, then offer specifics.

Hire Those Who Connect With Your Why

Find employees, partners and collaborators who share your core beliefs and purpose. Inner circles should align. Screen for mission fit.

Train Employees on the Why

Educate your team about your guiding principles and why you exist. Ensure everyone understands the ideology and can communicate it in their work.

Build Culture Around Your Why

Let your purpose shape company culture, policies, environment, procedures and incentives. Reinforce your why through organizational habits.

Tell Stories About Your Why

Share stories that provide narrative examples of your purpose in action. Stories give life to principles.

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Conclusion

The golden circle flips traditional marketing thinking upside down. By starting with why you do what you do, you can better inspire loyalty and connection with an audience. Defining your purpose, approach and offers in the proper order leads to greater authenticity and influence.

Simon Sinek’s simple but profound concept has shaped marketing and leadership practices by stressing the importance of leading with your inner motivations. When your why guides your how and what, you can build tribes not just make transactions.

Frequently Asked Questions

Q: Who created the golden circle concept?

A: Author and speaker Simon Sinek introduced the golden circle idea in his 2009 book “Start With Why” and related TED talk.

Q: How is the golden circle different than traditional marketing?

A: Traditional marketing focuses on features and benefits of a product. The golden circle flips the order to highlight purpose first before discussing products.

Q: How can I identify my company’s “why”?

A: Explore the core motivations and passions of your founders and employees. Analyze what really drives you beyond profits and guides your principles.

Q: How do I communicate our why to customers?

A: Highlight your purpose, values and ideology when you market and promote. Lead with your why in messaging and campaigns, not just what you sell.

Q: Does the golden circle work for non-profits too?

A: Yes, the golden circle can help non-profits better communicate their meaningful missions to supporters and donors. Purpose-driven marketing isn’t just for businesses.

Q: How can I measure the impact of leading with why?

A: Track metrics like brand sentiment, customer loyalty and retention, employee engagement, and willingness to recommend. Purpose-driven companies outperform on these measures.

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