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So the solution for these providers would appear to be to create ‘added value’ by giving their brand ‘personality’, in other words associating the brand with a lifestyle promise designed to appeal to like-minded consumers. The product or service being largely the same but packaged and marketed in a way to be appealing to a niche sector. But how much of this brand building has true depth and how much is just spin? Here’s a genuine example: Our business was driven to distraction with O2 - we tried so hard to stay with them (you see the pain of changing to another was huge) but they made absolutely no effort whatsoever to resolve our issues so we changed to Vodafone. Yet not a week goes by without me seeing one of their stylish and impressive TV ads. Maybe we were the exception. Maybe for O2 we didn’t fit the profile of their ideal customer. But I don’t think so. The ads still seem appealing! Now we wait to see whether Vodafone can deliver on our expectations set by their huge marketing machine. How deep should a brand go within a business? Sorry about the pun, but surely branding must be more than skin deep. Isn’t it time for brands to prove their worth to consumers? Shouldn’t the brand offer a clear sense of guidance to employees and suppliers about what is important and where effort should be directed? After all, getting this right has to add value to shareholders. A US consumer survey showed that, at best, only 11% of consumers received excellent performance from the banking sector and just 4% rated Car Dealers as excellent. What is not revealed in this survey is whether this is down to the fact that customer experience fell short of brand promises or whether the sector as a whole falls short of delighting consumers’ most basic expectations. Either way, it would appear there is a job to do in aligning brands and the products or services they represent, to consumers and the people responsible for delivering them.
The responsibility for building the brand in many businesses still rests primarily with marketing teams, agencies etc. And it’s understandable why this is – historically that’s the team responsible for developing brand image and promoting it. But placing the task with this team alone limits the brand potential, unless they are also responsible for shaping leadership, business operations decisions, budget planning, supply chain management, service level, employee recruitment, advancement and performance - the list goes on. An alternative way of looking at this issue is by questioning the economics of marketing. For example, for every £1,000 invested in building brand awareness, how much of this is lost because the brand itself doesn’t live up to the promise? Instead the £1,000 invested should be spread across both awareness and capability, not the product capability, because this is likely to be already covered, but the people behind the brand. After all, there is little sense in building brand loyalty with customers if your employees are indifferent. The economics of brand loyalty It is a fact that indifference of employees is the cause of 68 per cent of customer defections to other brands - only 14 per cent defect because of product quality. And, a 5 per cent increase in customer brand loyalty equates to anything from 25-85 per cent increase in profits. In the battle for genuine brand loyalty, the companies that are in front are those that are nurturing a business culture that expresses their brand values every day, through the way people work together with customers, each other and their suppliers. They understand the brand, its value to the business and their role in delivering that value. In short they’re engaged. Extensive research of more than 1,700 companies representing in excess of 4 million employees has determined that overall, fewer than 50% of employees are ‘engaged’ in their work and the organisation. Some organisations have engagement levels as low as 11%, while for others it’s as high as 100%. A US research institute has also shown that the level of engagement, although it can vary widely across various groups of an organisation, and across organisations, has a large and distinct impact on business success. Companies that have an engagement score of 60 or higher have an average 5 year Total Shareholder Return (TSR) of more than 24%. In contrast, companies with engagement levels between 40 and 60 have a 9% average TSR, and those with an engagement level below 40 have an average TSR of –3-4%. Brand loyalty clearly begins at home! And some more facts:
A Building brand awareness in the market is clearly the fast way to building a type of brand value but alone it is not sustainable. Brand loyalty requires employee brand loyalty, which has a knock on effect of building customer brand loyalty. But employee loyalty is a complex issue. In a recent Manpower International Employee Loyalty Survey, 72 per cent of 1,454 UK and US employees polled said they felt loyal toward their organisations. But only 59 per cent felt their companies deserved that loyalty. More disturbingly, just under a third of the employees surveyed feel little or no loyalty at all to their companies. There’s ever increasing body of published works highlighting that there is a job to be done if brands are to live up to the promises they make to their customers. In our work with clients we are discovering that more and more business leaders are determined to address this issue. In our experience there’s a crossroad for business leaders to face when it comes to brand marketing strategy – to give in to spin and hope that customers swallow it, or to create real value by building a culture inside your business that represents the distinct nature of your brand and that your target customers truly value. For further information about Brand Loyalty and invigor8’s approach, please contact Michael Parkes: +44 (0) 1943 850058 Sources: |
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I was reading an article recently that was making the point that in almost every sector consumer choice is increasing through the advancing global economy and technology etc etc. I’d agree to a point: take flat screen TVs for instance. There are so many available now, but I have real difficulty seeing any difference between them. Is this real choice or just a plentiful supply that’s driving down price? At least now some manufacturers are braving it and offering products in something other than silver! It seems like the same story with service providers too. Look at the mobile phone operators for instance; yes there are plenty of them but honestly can you see a difference? And now we hear the Post Office is joining the fray! More choice or just more supply?
