Founded: 1992 • San FranciscoWhen British Petroleum PLC started its acquisition spree in the late 1990s, the conservative British oil exploration company amassed an impressive portfolio of retail businesses and lubricant manufacturers, such as Amoco and Castrol. It also acquired a disparate mix of brand, marketing, and business strategies that needed to be refocused under one lens.
That's where San Francisco–based Prophet came in. The branding and marketing firm helped BP devise a strategy to combine and transform its brand and to adopt business values for all of its assets. Today, "consumer insight and customer intimacy drive BP's growth, not just asset exploration," says Michael Dunn, Prophet's president and CEO. Marketing and brand transformation successes like BP's have put Prophet on the radar screens at many large, multinational firms. Its mix of branding, marketing expertise, and business strategy has helped garner clients like UBS and Boeing. What's more, as revenue remains flat at management consultancies, Prophet expects 35 percent revenue growth for the third year in a row.
Dunn describes the firm as more "start over" than a startup. Founded in 1992, Prophet Market Research (PMR) specialized in consumer research for financial services firms with revenues of $1 million to $2 million a year. In 1998, David Aaker, a professor at the University of California at Berkeley and a recognized leader in brand strategy, merged his own small consulting firm with PMR, which Dunn had recently joined as president. The new company became Prophet Brand Strategy in 1999, with Aaker as vice chairman. Over time, the original PMR executives left the firm, additional senior management talent like Scott Davis and Tom Agan joined, and the company was relaunched simply as Prophet.
"We had two major growth drivers in the early years: Dave's reputation and the convergence of the Internet as a marketing and selling medium," Dunn says.
Aaker's published work on branding caught the attention of senior executives at large companies who would track him down at Berkeley to consult on tricky brand issues. Dunn's challenge was to hire the right set of skills and capabilities behind Aaker's expertise and commercialize it. He hired former chief marketing officers and brand managers from well-respected companies like Nestle and Walt Disney. More recently, Prophet tapped customer insight expert John Copeland, a former McKinsey partner, in February to round out the roster.
In the first years, the Internet propelled the business. Prophet helped traditional, branded clients like Ann Taylor, Levi Strauss, and L.L. Bean develop strategies for bringing their brands on-line. In 2001, marketing and brand strategies became a platform for broader organizational change or transformation. Today, Prophet is working with clients like Abbott Laboratories on global, enterprise-wide brand and marketing transformations.
In the boardroom, Prophet's competitors come from both ends of the consulting spectrum — from full-service management consulting firms with marketing practices, such as McKinsey and BCG, to graphic design firms with consulting practices, to large ad agencies. Prophet wins clients with a combination of deep marketing expertise and "an operator's pragmatism," Dunn says. Although Prophet's price points are usually 20 to 30 percent higher than those of design firms, they're usually 20 percent lower than those of management consulting firms.
To Prophet's advantage, most negotiations are done with chief marketing officers who can't justify full-service prices or lack the signing authority of a CEO, he adds.
Today, Prophet has branded a solid name for itself, with 100 professionals and offices in Chicago, London, New York, San Francisco, and Tokyo.
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