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Published: May 26, 2009

 
 

The Trouble with Brands

Brand strength measures the brand’s growth potential. It incorporates the brand’s relevance (consumers’ perceptions about how appropriate the brand is for them) and its differentiation (consumers’ perception of the brand’s unique meaning to them). Brand strength reflects the brand’s future value, and is a leading indicator: an early visible sign of change.

Once we identified the attributes and importance of brand energy, we found that it fit closely with differentiation, and thus combined them into the single metric of energized differentiation. The impact that energized differentiation has on relevance is extremely important. Without relevance, the brand will languish. The brand may stand out with energy but have no meaning to consumers. Relevance is the pathway to strong consideration, trial, preference, and ultimately share of wallet. This is especially important in today’s downward-spiraling market.

The unique measure of energized differentiation establishes a direct link between brand momentum and creativity, financial earnings, and stock performance. Brands that currently have energized differentiation in vast quantities include Amazon, Axe, Facebook, Innocent, IKEA, Land Rover, LG, Lego, Tata Nano, Twitter, Whole Foods, and Zappos. Given the importance of energized differentiation in determining overall Brand strength, it’s useful to look more closely at its subcomponents.

Differentiation not only represents the brand’s point of difference, it also creates the meaning, margin, and competitive advantage in the brand. Differentiation is made up of the way consumers perceive three brand attributes: the offering, or the measure of the brand’s special characteristics in terms of products, services, and other content that the consumer experiences; uniqueness, the brand’s essence, positioning, and brand equity; and distinction, the reputation the brand has earned through existing communications and brand image created up to this point.

But energy is where the action is. It reflects the consumer’s perception of motion and direction. It sustains the brand’s advantages. High-energy brands create a constant sense of interest and excitement. Consumers sense that these brands move faster, see farther, and are more experiential and more responsive to their needs. In our correlations, we see a definite pattern in energized brands: The more energy they have, the greater consideration, loyalty, pricing power, and brand value (as a percentage of firm value) they command.

The three attribute clusters that make up energy have all been associated with momentum and industry leadership. They are:

1. Vision. Brands with vision embody a clear direction and point of view on the world. They convey what they’re on this planet to achieve. Some brands promise to change the way people think; others seek to shift expectations about the way things are done. Vision-driven brands see farther; they galvanize and inspire consumers to join in, allowing the brand to travel into new categories and create new meaning.

A parent company’s reputation can play a significant role in driving brand vision: How does the company act and behave toward its consumers, its employees, or the world beyond commerce? Does the company have an inspiring reputation that consumers admire? Is the company a great place to work? Does it care about social issues? Does it have a unique and powerful culture? In a transparent society, consumers don’t divorce their perceptions of the brand from overarching company values and conduct. They expect visionary brands to stand for higher-order benefits — and that also goes for the company behind the brand.

Brands that score strongly on vision include General Electric, Walmart, and Toyota, which have led in their categories on energy savings; Southwest Airlines, which says “Employees are our first customers” — and means it; IKEA, named one of the world’s most ethical corporations in 2007 for its employee practices and its promotion of environmental issues and children’s welfare; and Subway, which invented a new category of quick-service restaurant, healthy fast food.

 
 
 
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Resources

  1. Gregor Harter, Edward Landry, and Andrew Tipping, “The New Complete Marketer,” s+b, Autumn 2007: Organizations with strategically focused, broadly responsible CMOs may produce better results than their traditionalist peers.
  2. Leslie H. Moeller and Edward C. Landry, “Measuring Your Way to Market Insight,” s+b, Spring 2009: Marketers can develop their analytical prowess to better understand their customers.
  3. Nick Wreden, “Marketing: By the Numbers,” s+b, Winter 2006: A review of books about marketing’s new accountability.
  4. For more business thought leadership, sign up for s+b’s RSS feed.
 
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