By: Chelsea C. Hammond
There really are no unique products or services today. In many sectors, competition is fierce - made even more so by the current state of the economy, as consumers tighten their belts and make purchasing decisions discriminately. All too often, a company distinguishes their offerings from that of their competitors not by tangible difference, but through branding. Consumer perceptions about the brand itself will influence their purchase behavior, differentiating the offering from that of competitors.
Given the influence of the brand on consumer behavior, managing the brand as an asset is essential to achieving long-term profitability. In a recent survey, The Pert Group interviewed over 200 managers and executives about the health of their company brands. Respondents were drawn from the American Marketing Association, the Business Marketing Association, and the Marketing Executives Networking Group. The sample included a mix of industries, company sizes and executive levels (senior and middle managers).
How Managers Define Brand Health
Typically, brand health is defined (and assessed) in terms of finances/volumetrics, consumer attitude toward the brand, and market positioning. In the current study we asked managers and executives about the factors they associate with a healthy brand; they report that a healthy brand will develop a sense of pride (43%), builds a premium image in the minds of end users (41%), and drives loyalty (40%). Clearly, managers believe that brand health directly affects consumer psychology and behavior.
However, less than a quarter of managers note that a healthy brand gives employees tools and frameworks to facilitate day-to-day decision making (22%). This lackluster response to company involvement with their brands indicates that there is a tenuous connection between the brand and the company. Such a result suggests that many companies may not be leveraging the power of a brand-based culture to define, strengthen and advance brand health. Instead of looking at the brand as a company asset, managers are viewing it as a consumer commodity.
Overall, the majority of managers and executives (80%) believe that company brands are valued or extremely valued. Yet, for a brand to establish and maintain a strong presence within the marketplace it must have relevance. Despite high value, managers report lower brand relevance and brand characterizations such as being proactive, inclusive, and fresh. These results suggest that brand innovation is lacking, an indicator that brand health is perhaps stagnant.
Company priorities can influence brand health. Managers note that meeting sales and revenue targets are their top company priorities. Their second and third priorities are maintaining relevance with target populations and protecting the brand image, respectively. Low on the list of priorities is things like monitoring the emotional connection with the brand, ensuring innovation and ability to compete with competitors.
Clearly, managers value the ability of the brand to influence consumer behavior; however, this is an outcome in and of itself – the brand must be healthy for it to have a strong market affect. Yet, priorities that enhance brand health, such as ability to compete, are viewed by managers as less important. In this case, it appears that managers are putting the cart before the horse. The focus should be on developing a strong brand personality and relevance first, as this will translate to sales and achievement of revenue targets.
Ultimately, brand health should be the responsibility of every employee. Yet, the majority of managers and executives (81%) state that marketing/sales management is directly responsible for brand performance; this sentiment is especially true for larger companies (> 100 employees) more so than smaller companies (< 100 employees). Clearly, brand management and health are perceived to be a marketing and sales function – a sentiment that can shift the responsibility from all employees to a mere few, and weaken a brand-based culture and overall brand health.
Assessing Brand Health
The importance of brand health assessment can often be overlooked by a company. It is not enough to assess brand health sporadically or to begin assessment when indicators of decline emerge. The brand should be evaluated on a consistent basis; monitoring over the life of the brand can provide valuable insight into consumer trends, cause-and effect actions, and future behavior. In short, brand health assessment can facilitate better brand management and increase the likelihood that a brand will succeed.
When brand health is assessed, it is typically evaluated via consumer perceptions and actions. Consumer perceptions about the brand may include measurement of attitudes or awareness, while consumer actions are almost always measured in terms of revenue, market share, or purchase intent. Despite the importance of assessment, over 48% of managers and executives report they have no formal methods of measuring their brand’s health. Another 34% report that they do assess brand health using scorecards and dashboards, and 26% mention holding formal brand reviews. The lack of formal brand health assessment is surprising; consistent monitoring of brand health is essential to maintaining a strong brand and for effective brand strategy.
When companies do evaluate brand health, they typically assess a mix of market activity and consumer perception. Managers and executives report measuring customer satisfaction (62%) as their top brand health metric, with revenue growth/decline (59%) as their second most utilized assessment. Managers also report customer retention (58%) and customer loyalty (49%) as key metrics. Yet, it appears that for many companies much of brand health assessment focuses on the ‘here and now’; less than a third of respondents report that customer conversion rates are used as a brand health metric – indicating that assessing change rates are not a top priority when measuring brand health. However, well-rounded brand health assessment should not only measure the current, situated state of the brand, but also the brand-consumer relationship over time.
Improving Brand Health
Most of us know that when a brand doesn’t meet consumer expectations, outcomes such as revenue and sales suffer. Managers report that the major indicators of decline are poor customer service, loss of market distinctiveness, decline in brand relevance, and new competition. They believe that decline is most often a result of lack of brand support (47%), and brand deliverance on promises (47%). Likewise, when resources have not been properly allocated manager believe a negative impact on brand health can occur (46%). These three responses suggest that managers believe that when the brand is not supported from a resource or development standpoint, brand health may be negatively impacted.
To improve brand health, managers report they most often (top two box scores) work to ensure consistency of communication (66%). Other key endeavors included, taking actions to improve performance (59%), using media consistent with consumer preferences (55%), and updating/creating new advertising and communication (54%). Of the top four improvements, three are aligned with marketing and communication efforts. Managers also report these four actions as being the most effective at improving brand health. Clearly, managers and executives believe that dialogue with the consumer is the most important way to reach them and improve on brand health. In the end, every manager wants their brand to succeed. Managers report the most important outcome of brand health improvement efforts is increased sales, followed by increases in customer loyalty and satisfaction.
Building a Brand-Based Culture
Overall, the entire organization should be accountable for brand health. While it is the responsibility of brand managers to create a brand that communicates a constant and clear message that resonates with consumers, the entire company must be accountable for consistently supporting that brand. One effective way to get the entire company supporting the brand is by instilling a brand-based company culture. A brand-based company culture is one where the brand is understood and supported by all members of the company.
In a brand-based culture, employees know what the brand stands for and what their roles are in supporting the brand. Educational tools, such as brand guidelines, provide employees with the directives and frameworks to ‘live the brand’. In addition, a brand-based culture should reflect strong brand-employee psychological identity which will facilitate good feelings about the brand and a sense of pride from it. This psychological relationship with the brand helps employees develop a connection with the brand that will positively influence their internal and external actions.
Brand-based cultures are typically developed and supported through a top-down approach, where the CEO and upper management lead through example. These leaders should propagate the brand-philosophy through daily reminders, sharing the brand with employees and shareholders, and brand-strategy integration.
All in all, maintaining brand health is the responsibility of the entire company. The most effective way for a company to support a brand is through a brand-based culture. When an organization works together to sustain a brand the ultimate payoff can be achieved – long-term profitability.
Chelsea C. Hammond is Director of Knowledge Management for The Pert Group, a research-based consultancy firm. She has a diverse background in both knowledge management and research design and analysis. She understands the importance of grounding research, insights and strategy in business knowledge to achieve effective and innovative solutions, and she integrates that philosophy into processes and practices at The Pert Group. She can be reached at firstname.lastname@example.org.