Tackling the Tougher Aspects of Brand Building
by Judy Hopelain
September, 2006
Senior
executives often equate “brand building” with advertising. Sales
executives, in particular, believe awareness is the critical bottleneck
to meeting their sales goals complaining that “if customers don’t know
about us, they can’t possibly invite us to the party.” Thus, they are
often content for marketing to focus almost exclusively on the next ad
campaign.
The
reality is that building awareness is only a small part of brand
building, and arguably the easy part. While we have worked with
numerous CMOs to build awareness, we have focused the bulk of our
efforts on driving tangible business impact in areas other than marcom.
The hardest part of brand building involves serving the most profitable
customer groups, delivering them a compelling and differentiated
experience, training the personnel who interact with them, and so on.
These aspects of brand building are also the ones that produce the
greatest returns - financial as well as psychic.
Empowered
CMOs understand this difference and find ways to make their case. Our
work with one CMO at a diverse professional services firm led to hard
facts confirming this argument.
We
found that brand awareness matters in driving preference, but getting
key aspects of the client experience right can drive three times the
business impact. Even more impressive, we found that buyers are willing
to pay more – in some categories, a lot more – for a service provider
who can deliver the desired client experience. Meanwhile, brand
awareness alone did not appear to justify a premium at all.
These
findings sprang from discrete choice research with buyers of these
types of professional services that were asked to choose between
hypothetical combinations of several service features, including Team
Interaction, Team Expertise, Thought Leadership, Brand Name Awareness,
and Price. Buyers of virtually all the types of services we tested
rated Team Interaction as the most important service feature when
considering alternative offers.
The price premium potential of operationalizing the brand
became clear once we isolated the impact of price on choice. Even after
a simulated 15% price increase, preference share for the partially
operationalized brand increased by over 20%. A fully operationalized
brand gained 18 points of preference share after a 20% price increase!
No
question, bringing the brand to life is hard work – harder than handing
over an assignment for a new ad campaign to your agency. Success
requires alignment and accountability for doing different things and
for doing things differently.
These
results gave our CMO client the ammunition he needed to sway his
leadership toward action. By heading off the temptation to rely on ad
spending to drive share, this CMO was able to demonstrate how the hard
work of bringing the brand to life pays back, in dollars and cents.
From September 2006 Prophet Newsletter
