More than a decade ago, CVS faced a $1.5 billion demand that tested its values. I recently heard the inside story about the decision to end cigarette sales from Laura Stone, the consultant who initiated the conversation.
How CVS turns sacrifice into brand power
Stone remembers the moment vividly. The entire leadership team was in the room: the heads of marketing, retail, pharmacy, operations and even the incoming CEO, Larry Merlo. They had just formulated and agreed on a new company goal: to improve customer health.
“I didn’t think it was very impressive,” Stone said. “But for them it was huge. Because for the first time, they aligned every part of the company around a shared idea of better health.”
Then came what she calls the paradox process, the uncomfortable work of holding your stated goal up to the mirror and asking, “What tensions or contradictions does this reveal?”
That’s when Stone said the words that changed the company’s history: “If I let you leave this room without talking about tobacco, you will have mud on your face. You will be seen as hypocrites.”
Silence. No one had dared to say it. Not a single director had mentioned cigarettes, even though those nasty smokes were the elephant in the room: a $1.5 billion line item on the income statement. From that moment – that tension between purpose and profit – came one of the boldest branding decisions in modern business: CVS would stop selling tobacco products completely.
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Stone urged Merlo to create a Skunkworks team, a small secret task force to investigate what that would take. She warned him: “If you come second in the market, it’s nothing. If you come first, it’s historic.”
And it was. When CVS announced its decision, Wall Street cringed. The company’s shares fell. But then came the outpouring of gratitude from President Obama, the U.S. Secretary of Health and Human Services, the American Cancer Society and millions of customers.
Within five years, the company had recouped the $1.5 billion in revenue it had generated from selling tobacco products. Ten years later, CVS’s sales have doubled. What changed was not just the product mix. It was his moral authority.
How action creates brand credibility
The great Roy Spence of Austin, Texas, advertising agency GSD&M, wrote a groundbreaking book on the importance of purpose for an organization entitled “It’s Not What You Sell, It’s What You Stand For.” As he said, “Your reason for being goes beyond making money and it almost always results in making more money than you ever thought possible.”
Brands create a deeper emotional connection when they do something proactive that their audience didn’t expect. And this deeper emotional connection helps them weather economic storms, earn customer advocacy and strengthen long-term customer value. And that brings us back to Thanksgiving.
Thanksgiving is about appreciation that comes from sacrifice. It’s about giving up comfort, time, or gain for something greater: community, connection, health, humanity. CVS’s choice wasn’t just a business move. It was an act of gratitude from the business community. Gratitude for the people on whose trust the company depends. Gratitude for the communities they serve.
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The irony is that gratitude flowed both ways. When CVS gave up smoking, the public gave back the faith. Employees gave back proudly. The world returned respect. That’s the paradox underlying all meaningful branding: the courage to act against short-term gain in the service of long-term truth (and growth).
Eliminating cigarettes improved CVS’s brand image, giving employees something to be proud of, customers something to believe in, and competitors something to think about. It also changed the understanding of the purpose of the marketing industry. The target is not the paragraph on your website. It doesn’t say what you believe. It’s not lip service. It’s the decision you’re willing to make that proves you mean business.
That’s why when CVS told the world it was about better health, people believed them because they could see the evidence. Branding starts with words. But faith comes from actions.
Gratitude becomes reciprocal
Actions deserve appreciation for the effect they have on the world. It’s a long game that pays off far better than what I call the cowardice of quarterly conversion. And that’s a lesson worth remembering this Thanksgiving.
As marketers, we like to thank our customers in posts, in emails, in slogans. However, the brands that people truly love are those that sacrifice margin for meaning, knowing that money follows good deeds.
CVS did not issue a press release about the launch of the new “We Care About Customer Health” goal. They have done something inevitable. They have proven it.
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