I like to think of brand building as the quest for market share and mindshare. But that journey has become a steeper hill to climb. How much steeper? On a scale of 1 to 10, I’d say it’s an 11.
Here’s why. Empowered 21st century customers have higher standards for your company and the products and services you produce. That’s what we learned in our 2012 North American Brand Performance Study. I recently talked about it in the CMO Strategy section of Advertising Age. But I’d like to provide some deeper insight into “Brand Building In The 21st Century” in this post.
To put the learning from our study in context, consider the graphic below. The strength of a brand’s position and perception in the marketplace is built on four pillars of equity: 1) credibility; 2) leadership; 3) uniqueness; and 4) relevance. As you build stronger equity across those pillars, it supports higher performance over the long haul through superior: 1) referral; 2) pricing power; and 3) preference.
This foundation of brand building still applies in the 21st century, but our analysis revealed that the pillars of brand equity have started to crack under the weight of consumers’ higher standards.
- The higher standard for credibility is brand pride, and it drives referral. Many companies relentlessly focus on establishing their brand’s credibility, usually by delivering reliable, dependable products and services. But if you stop there, you’re missing an opportunity to build your brand. Marketers must aspire to become more than just a credible brand by becoming a brand that people are proud to associate with. Furthermore, brand pride is a more significant driver of referral than factors like quality, delivering on expectations, and honest business practices. This was evident when comparing Nike to Reebok. Both are stable companies that make consistently high-quality products. However Nike’s pride of association was 18% higher than Reebok and its rate of referral was 51% greater.
- The higher standard for leadership is a brand’s contributions to society, and it drives pricing power. A critical task of brand building is to grow the company’s market leadership — your distribution, footprint, and general market presence. But consumers expect leading companies to make greater contributions to society. Brands that are perceived as “making the world a better place” have greater pricing power. In fact, societal contributions were a stronger driver of pricing power than innovation. Our study indicated that Target benefits from a 32% higher perception that it makes the world a better place than Walmart, which is correlated to a pricing power that is 53% greater.
- The higher standard for uniqueness is special experiences, and it drives pricing power. A cornerstone of brand building is uniqueness — a company’s ability to innovate and differentiate from competitors. But marketers must strike the right balance between creating a unique identity and delivering unique experiences. In fact, delivering special experiences was the most significant driver of a brand’s uniqueness. The payoff is that brands that “make people feel special” command greater pricing power. American Express scored 38% higher than MasterCard on delivering special experiences and also racked up 19% higher pricing power.
- The higher standard for relevance is indispensable value, and it drives preference. You can’t build a brand without being relevant to the market. Your offering, messages, and experiences must all resonate with the market in order to succeed. But relevance is passé in a world where consumers have so much control over the decision process and so many choices to consider. Consumers use brands more than ever to help them make quicker, more convenient choices. Translation — consumers don't simply want relevant brands; they want indispensable brands. Brands that were seen as something “people can’t live without” were able to command greater preference. For instance, Apple’s indispensable value was 85% higher than LG, and its preference was 40% higher.
Can your brand support the higher standards of the 21st century customer? Or is it time to reinforce the pillars of your brand's equity?