According to legend, the seven blind swamis felt different parts of the elephant and came to seven different conclusions.
The one feeling the elephant’s side declared that an elephant was "very like a wall." Another felt a leg and concluded that an elephant was "very like a tree." A third grasped the elephant’s tail and decided that it was "very like a rope." And so on.
The consulting Task Force failed to achieve consensus, since they got hung up on seven different Situation Analyses. (The one holding the tail also got elephant manure on his flipflops, an occupational hazard for visually impaired animal fondlers.)
Like that pachyderm, a brand performing below expectations is often approached from multiple directions, with marketing experts tugging and probing and prescribing, triggered by whatever portion of elephant anatomy is at hand.
The ad agency detects an advertising problem; the brand manager’s spreadsheet proves that retailers are at fault; the sales promotion agency knows it’s a promotion problem; the packaging experts say a redesign will save the brand; the regional sales managers want an extra 5% for a new trade deal, and the CFO says it’s a brand in decline, so quit spending on it.
This isn’t literal blindness … but recognize the limitations of strategies based on narrow perspectives. Somebody somewhere will get elephant poop on her Jimmy Choos.
This White Paper offers a brief overview of what we regard as the scope of brand asset management, with audience participation: Sharpen your #2 pencil and keep score.
First of all, brand asset management is a new discipline for most brand holders. It’s a perspective that differs sharply from "beancounter-centric" accounting, the conventional viewpoint that values brick-and-mortar more highly than, say, the knowledge and skill of a sales force. We have to move beyond the bias that accounts for a paper clip, but discounts a company’s reputation.
Most brand managers focus on tangible, easily quantified assets. When you combine that with "next-quarter-itis," the national penchant for focusing on short-term numerical goals regardless of the impact on brand equity, you get systemic long-term problems. While it’s most apparent in publicly-traded companies, it’s contagious. In this mind set, for example, volume will always seem more important than market share, and easy-to-measure quarterly results will matter more than hard-to-measure customer satisfaction.
Add to those institutional biases the short-term perspective of Brand Managers at General ____ (fill in the blank) who know they’ll be on X Brand for 18 months, tops, before moving on to Y Brand (or field sales, or something). They know their career path is paved with short-term fixes. Is it any wonder that budgets for indiscriminate high-value couponing (and other brand demotions) are growing far faster than budgets for brand-building?
Come, let us audit together.
Pick a brand, any brand. If you have more than one to choose from, pick the one that makes you lose sleep at night. Grab a pencil and keep score as we review sixteen of your brand’s vital assets. Use a separate piece of paper if you want someone else to go through this for the sake of comparison.
A brand’s most valuable asset can be the name itself. For one thing, a name can have inherent selling power when the word(s) stand for something, showcasing and explaining the uniqueness of the product or service. By this measure, for example, "Vapo-Rub" is more valuable, more descriptive, than "Formula 44," and Mercury "Cougar" promises more than Buick "Century."
But this value of "name" pales in comparison with the enormous power of those brands that have built equity after decades of consistent brand-building activities. "Diet Rite," for example, no matter how descriptive and colorful, can’t approach the equity in "Diet Coke," a heritage built on a bazillion dollars of investment ad spending.
In any brand asset audit, we give a lot of weight to the use (and occasional misuse) of a name. Investigating the practical limits of line extensions, for example, forces us to distinguish between those new product efforts that re-invest brand equity and those that dilute it.
In box #1 on your scorecard, give your brand anywhere from 0 to 5 points for the salesmanship built into the meaning of the name … plus anywhere from 0 to 10 points for top-of-mind awareness, a fair measure of the value of the brand’s history of investment.
It’s the ultimate final dialogue with the consumer. It must call attention to itself, set the product apart from the category and other products in its own line. We don’t know why packaging is so often regarded as separate from the selling process, a stepchild in the marketing family. Thinking of packaging and P.O.P. as brand assets to be invested in, and deployed like other managed assets, helps to focus on how important they are to the final sale. A family of packages can reassure consumers by projecting a persuasive brand personality and value-added consistency. At their most effective, packages can jump off the shelf … and close the sale.
On your scorecard, give your brand from 0 to 10 points for packaging and P.O.P. strengths. If you’ve got a strong retail presence compared to your competitors, but one that can’t be compared with the best of the best, don’t give yourself more than 5.
Reach and frequency
When most people think of advertising effectiveness, they tend to think in terms of an ad budget. So a few people are deluded into believing "If we spend twice as much on our advertising, we will get twice the results." (Not you, of course, and not me. Some other guys. But trust me, they’re out there.) It was never true, and it’s getting even less true every year.
In an age where niche markets are proliferating and mass markets are mostly myth, it is very helpful to think of reach, frequency, and ad content as related but separate assets in your portfolio.
Reach has become more important than frequency, with so many new marketing tools to target "rifle-shot" segments. These have created efficient new ways to get to specific consumer affinity groups and psychographic slices of the almost-extinct mass audience. (Remember when there were general-interest magazines?)
Frequency is still basically deploying money against markets, boxcar numbers flexing budgetary muscle. Market segmentation strategies can, however, deliver more leveraged results with equal frequency but (relatively) smaller budgets.
So, give yourself 0 to 10 points for smart segmenting … plus 1 to 3 points for Share of Voice: media spending below (1), at (2), or above (3) the spending level of competitors.
The greatest leverage of advertising is in its Creativity. A great ad can be, and often is, 10 times as effective as a mediocre ad.
It’s possible, for example, to cut a media budget by 25%, and know that you’ll lose roughly 25% of your effectiveness. But if you cut production costs, e.g., by 25% … you can’t know the possible impact. You might lose up to 90% of your effectiveness.
We’re not just talking about throwing money around here. It’s true that dazzling production values can’t rescue a non-idea ("It’s it. And that’s that"). But it’s also true that looking like a local car dealer (or Radio Shack) can turn off an audience’s receptors to even the strongest ideas.
If we think of media spending as an unleveraged investment, and ad content as highly leveraged, we will be less tempted to steal budget from the creative process to buy a few more spots in Lubbock.
Candidly, score 0 to 10 points for what your ads say, plus 0 to 10 for how memorably and unexpectedly they say it. Then multiply that total by the "Share of Voice" score you gave yourself, above. (This is the single biggest score you’ll get, because these assets are the biggest equity builders. It stands to reason: more leverage = more importance = more points.)
Can promotions kill brand equity?
Can promotions build brand equity?
Yes … if one sees to it that the promotional activities enhance and reinforce the basic brand image. In other words, don’t needlessly, blindly switch on Marketing Autopilot, drop millions of high-value coupons and call it a plan.
To put it bluntly, sometimes FSI stands for Failed to Search for Ideas.
Score 0 to 5 for a strategically sound promotion policy. Then subtract one point for every coupon promotion in the last 12 months. Range = -5 to +5.
There are two kinds of consistency that are both important for brands: consistency from year to year, and consistency across all communications vehicles.
If a brand changes its personality every few years, it runs the risk of having no image at all. (What does Canada Dry stand for, anyway? How is a Plymouth different from a Dodge?) The Marlboro Man, on the other (tattooed) hand, suffers from no such confusion.
A firm hand is usually needed two or three years into any brand-building campaign to keep the agents of change-for-the-sake-of-change on a short leash.
The second kind of inconsistency is ad, promotion, packaging and PR people who aren’t reading from the same sheet of music. They each pursue their own vision, losing the single focus that consumers demand, and that erodes brand equity.
Score 0 to 10 for across-the-disciplines consistency, and 0 to 5 for across-the-years consistency.
In the conventional view, the single greatest problem for most consumer products brand holders is to get, hold, or expand retail shelf/floor space. And the conventional (that is, easiest) solution? Buy the distribution.
Pay the slotting fees, display allowances, baksheesh, and listing fees to get the shelf space … then discount like crazy to keep your facings, running an avalanche of coupons and rebates and similar margin-reducing activities to keep the inventory turning, making the retailer (not to mention Advo) prosperous.
For many smart marketers, however, Pushing with trade deals and Pulling with coupons can be prohibitively unprofitable. And not altogether consistent with developing a brand. There are alternatives.
Score 0 to 6 for breadth of distribution (are you in all the geography you want?) plus 0 to 6 for the depth and cost of that distribution. (Are you overspending to maintain marginal regions? Channels? Markets? Customers?)
Being in tune with the times offers lots of opportunities for "unpaid advertising." Clearly defined, strategically oriented public relations can be a powerful tool.
It’s an asset that can induce trial, enhance brand image, and build brand equity … if it is consistent with other messages.
Give yourself 0 to 5 points for how well you’ve exploited this brand asset.
Yes, it matters. And yes, it’s measurable. If your communications (and therefore your brand) are likable, then people will welcome your message. It’s a fundamental truth: people buy from people (read Brands) they like. There are no rational purchases. None.
Give yourself up to 5 points for a refreshing brand "attitude."
Leverage over competitors is the best result of enthusiastic trade support. For many brand holders, of course, that leverage can be enormous: in some industries, trade support can be life or death. Remember: in today’s environment, you can achieve your goals only by making your trade network believe that you are helping them achieve theirs. Every sales force worth its salt cultivates relationship sales.
Score 0 to 5 points for how your brand is supported (versus competitors) by the trade.
You’d think that your scores you recorded for Distribution would tell you all you need to know about your Sales Force. And, while that’s usually true, any change in a selling organization brings a dynamic to established distribution. Adding reps, or changing sales management, or altering compensation programs — any substantial change can weaken the strongest distribution or (conversely) pay big dividends.
Give yourself up to 10 points for the strength and discipline of your front-line troops.
Certain user groups and market segments carry more significance and impact than others. Distinguish between high-index users and high-potential users, for example. People with developing (or changeable) brand images are highly important.
This translates in many cases into pursuit of the young, in hopes of securing a long-term predisposition toward a brand. If it works, when it works, the benefits can roll on for decades. Consider Honda. They pursued and nurtured a relationship with a whole generation of consumers and continued to fine-tune the product line to meet their changing needs.
On the other hand, narrow appeals mean narrowing markets. People who buy fur coats, Oldsmobiles, and Ross Perot are dropping out faster than they’re being replaced. It’s not irreversible: whole categories (like gourmet coffee) have been rejuvenated by young trendsetters.
Add 0 to 5 points to your score just for having enough good research to know your user intimately.
It almost goes without saying that product performance is a key factor in a buyer’s decision to repurchase. If the world were rational, or fair, the objective realities of product performance would generate trial, too. The better mousetrap, and all that.
The key factor in a consumer’s decision to try a product in the first place, however, is perceived product performance.
While it’s up to you to maximize actual product performance, many different components of brand image influence consumers’ perceptions of anticipated benefit. That’s a shared responsibility of ads, promotions, packaging, P.O.P. … everything that reaches the minds and emotions of buyers.
Score 0 to 5 for actual performance, 0 to 5 for consumer perceptions of performance.
Frequency of use equals frequency of brand-affirming (or brand-switching) decisions. That’s a key equation, because it helps explain why loyalties grow stronger to Snickers bars than to oatmeal. It also helps you to know how many trials you have to induce to conquer competitive users.
You can never know too much about purchaser behavior: Do repurchase patterns change by time of day, time of year, retail environment, competitive pressure, or promotional activity? Can these behaviors be altered? What are your use-up rates? Do users take themselves out of the market for a considerable time with each purchase?
Too many marketers bask in the glow of so-called "Brand Loyalty," which has the unintended consequence of taking good customers for granted. Nobody should count on the continued (blind) loyalty of people who have chosen a brand in the past. Brand owners should be loyal to their customers, not the other way around. Consumers will buy and re-buy only those brands that continue to live up to their perceptions of added value.
How well have you planned and exploited ways to promote additional uses/occasions, which tend to increase the velocity of repurchase? Score 0 to 5.
In an age of computerized data bases, and number-crunching machines of awesome speed, there’s little or no problem with the quantity of information available to us. Indeed, we see a lot of Analysis Paralysis.
The key is how to turn digits into decisions. And the key to the key (to murder our metaphor) is to recognize and use actionable research.
Do the findings lead us to action, or just to filling up PowerPoint slides? Can we make the leap from raw tabs to real insight? Can we learn how to use our brand assets more creatively, more unexpectedly? If not, save the money.
The ongoing fascination with focus groups (and concurrent neglect of quantitative studies) has had unfortunate side effects. Some marketers suffer because they broke rule one: they tried to project quantitative results from qualitative research. We call it "But That Woman in Walla Walla Said" Syndrome. The absurd number of new product offerings is a monument to this kind of wishful thinking.
Hint: if your focus group moderator ever asks for a "show of hands," find another moderator.
One valuable function we offer as an agency is to question every client’s old research (and assumptions and comfortable rituals), like alien visitors just arrived from another marketing planet.
If your research is aging (or missing), or it’s been a while since your corporate assumptions have been challenged, it’s time to restate all your questions and question all your answers.
Subtract 5 points for wasting money on useless research, score 0 points for no research, and give yourself up to 5 for actionable results that make you say "Aha."
In a rational world, price would equal value. (Of course, in a rational world, there’d be no civil wars, salad shooters, Madonna concerts, high-heel shoes, lawyers, clip-on ties, Pat Robertson, 3-card monte, or fuzzy dice. But we digress.)
Price is just one element in the complex, non-rational perception tug-of-war within consumer buying decisions. Value equals perceived quality, divided by actual price.
Perceived quality, of course, is what you hope to establish with your other assets.
Pricing decisions, insofar as a brand holder can actually control (or even influence) them, have to be handled with much more skill and attention than simply throwing coupons or rebates at potential buyers.
Score 0 to 10 based on your pricing. If you can establish and maintain a value-added premium price versus competition, give yourself credit for being perceived as a value-added brand. It’s a judgment call, of course. Sometimes it takes heroic measures just to maintain price parity.
What’s your total score?
(Out of a possible 200?)
Have you projected wishful thinking (or natural optimism) onto the numbers? Most people tend to be a bit on the over-optimistic side. Not that the objective total matters … but now put someone else through this same exercise. Would your staff come up with the same numbers? Would your distributors? Sales force? Competitors? Consumers? Where are the most obvious disagreements? Where can you find consensus? Which assets are clearly performing up to their potential? Which need a little hand holding? Which are a drag on your brand equity?
The fact is, every brand asset has to contribute to a value-added brand image to make the machinery work at peak efficiency. But prudent asset deployment calls for putting money, people, time and energy against the assets with the most leverage.
We can help.
Killian Branding provides a unique convergence of disciplines and capabilities, built around Brand Equity. This perspective has given rise to new methodologies, new planning criteria, a re-engineered and re-wired agency organizational structure, and a fresh look at some neglected assets.
As partners to our clients, we help assess both existing and potential brand equity, developing plans to manage a portfolio of brand assets that enhance that equity.