Source: WARC Best Practice, August 2020
Downloaded from WARC
This article explains the important role brand plays in driving growth.
- It provides actionable advice on structuring systematic and scalable brand-driven growth, based
on empirical evidence.
- The Brand-Driven Growth Blueprint is a practical management tool shaped around five key
- The article includes brand-driven examples from The AA, Caterpillar, BabyShop and Arm& Hammer.
Why it matters
Product-driven strategies will only take your brand so far, this research provides senior marketers with much needed courage in their convictions when committing to brand-driven growth.
- C-suite engagement will help secure senior commitment that will be instrumental to success. Ask what type of metrics they feel represent success and make it clear you want to align brand-driven growth with corporate objectives.
- TIf you understand your target customers’ values you can establish how well your brand values align with them. This paves the way for launching more relevant products and/or experiences that unify these values.
- The blind pursuit of brand-driven growth can result in disjointed product portfolios and experiences that feel
“off brand”. If not properly understood, brand-driven growth can actually do more damage than good.
Product-driven strategies will only take your brand so far before you commoditise your offer and get sucked into price-based competition. When this happens margins shrink so brands cut back at the expense of the brand and experience delivered. Customers go elsewhere. Sales slide. No one wins.
Human choice is primarily by the emotions we feel. Brands operate in the emotional space. Products don’t. So brands play a tune the human brain is receptive to. Brands also provide a powerful platform for growth in existing and/or new markets via extension and/or stretch respectively. This is why brand-driven growth is so powerful.
When product-driven growth reaches a plateau, sales stall and profit margins melt. At this point marketing executives usually turn their attention elsewhere to drive growth.
“From analysis of our IPA Databank – which contains quantitative data from 1500 advertising and marketing effectiveness case studies spanning almost 40 years, we know that brand-building lies at the heart of sustainable profitable growth for businesses.” Janet Hull OBE, Director of Marketing Strategy, IPA1 (Financial Times, 2019)
“Brand building dominates long-term growth and involves the creation of memory structures that prime consumers to want to choose the brand. This priming effect also improves pricing power and so, over time, has a strong impact on profitability.” Les Binet & Peter Field, Effectiveness in Context2
Empirical research demonstrates the important role brand plays in driving growth.3 This research provides senior marketers with much needed courage in their convictions when committing to brand-driven growth.
But even when armed with these insights, many senior marketers struggle to start and structure brand-driven growth initiatives. This chimes with IPA/FT research4 which highlights how 33% of senior marketers feel their ability to build brands was average – at best (Figure 1).
Figure 1: Marketers brand knowledge and understanding (Source: IPA/FT).
Guided by a practical management tool – The Brand-Driven Growth Blueprint – this article provides practical advice that will help you get brand-driven growth right.
Where to start: Building your business case for brand-driven growth
Influential research from the likes of Les Binet, Peter Field and Professor Byron Sharp (and colleagues) has provided senior executives with accessible insights that help them make a more concrete and compelling case for brand with the c-suite. Based on the data presented, even the hardest-nose CFO or sceptical CEO will find it hard to refute the fact that brands drive growth.
To help you get started, here are three charts I frequently use when making the business case for brand in the boardroom.
Figure 2: Binet & Field, The Long and the Short of It, 2013
Figure 2 shows that brand campaigns build share more strongly over both the short and long term than short terms direct response campaigns.
Figure 3: Binet & Field, The Long and the Short of It, 2013
Figure 3 is a thing of great beauty. It highlights the limiting effect that short-term, ROI-driven activations associated with performance marketing have on sustainable sales growth. It also illustrates how brand building drives long-term sales growth.
Binet and Field’s research shows short term activation and long term brand spend are interdependent. This insight gave rise to an initial rule of thumb where optimal budget spend should be 60:40 in favour of brand.
But stopping here and accepting this rule of thumb would confuse simplicity with simplification. This is why Binet and Field refined their research to deliver more nuanced, sector-based insights (Figure 4) that resulted in the original 60:40 rule of thumb being adjusted to 62:38 – as a starting point.
Figure 4: Source: Binet & Field: Effectiveness in Context, 2018
Figure 4 outlines how brands should spend at least half of their budgets – and in many cases much more – on brand if they want to drive long-term growth with brands.
So how do you get going with brand-driven growth?
Essentials: Structuring brand-driven growth
Figure 5: Brand-Driven Growth Blueprint
To deliver scalable brand-driven growth you need to embrace a structured approach. Using The Brand-Driven Growth Blueprint (BDGB) will help you do this (Figure 4). My agency has used this blueprint to help clients around the globe, across B2B and B2C markets, drive growth through brands. As with all blueprints the BDGB is not a silver bullet. It’s a system of thinking designed to focus and guide your efforts and actions.
To get the most from the BDGB you need to follow a sequential yet iterative process that is underpinned by five questions.
1. What corporate objectives does my brand need to support?
Brand-driven growth needs to dovetail with corporate objectives. If they don’t your endeavours will be doomed from day one. The c-suite will be focused on meeting or exceeding corporate objectives because personal reputations, stock valuations and lucrative bonuses depend on this. For this reason you’d be wise to ensure your brand-driven growth plans align and are measured with corporate objectives in mind.
2. Who is our target customer?
This sounds like a painfully obvious question. And it is. But in a world where “Customer Centricity Programmes” are a dime a dozen, organisations who really understand their target customer are few and far between.
Once you understand your target customers as real people (not numbers) the doors of innovation swing wide open. For instance, Oreo Thins were launched in response to consumers’ calorie concerns. Similarly, if you understand your target customers’ values you can establish how well your brand values align with them. This paves the way for launching more relevant products and / or experiences that unify these values. Red Bull’s adrenaline-fuelled experiences illustrate this point because the customer and experience are mediated via the
brand – or to be more specific – its values.
It’s worth remembering the influential research of Byron Sharp shows brand growth is driven by acquiring new customers. Binet & Field’s marketing effectiveness work paints a similar picture – regardless of price position. In order to acquire customers you need to know who they are. That’s what asking yourself “Who is our target customer?” is key.
3. What is our brand?
Brand-driven growth is a strategic endeavour. You’ll need to engage with the c-suite and other members of the senior management team if you want to get it right. The c-suite and senior management team may not be familiar with brand lingo so it’s best to keep your language simple.
Table 1 details the everyday language I use with clients to solve this problem, along with a worked client example for an outdoors recreation brand. The role these terms play in brand-driven growth is also outlined so you can see how they play out in practice.
Table 1: Intangible brand assets and brand-driven growth
4. What is the product or experience we want to launch?
If you’ve taken the time to think carefully about your target customer (question 1) the seeds of innovations will have already started to take root. Now you need to use your brand to filter these innovations so your branddriven growth is characterised by consistency and cohesion – not chaos. Answering the following questions will keep you on track:
Does this product / experience:
- Bring our brand values to life?
- Sit within the parameters / scope of our brand essence?
- Help us deliver our brand promise?
- Convey our brand personality in a relevant way?
- Support our brand positioning?
If you can’t answer yes to these questions you need to ask yourself if your proposed product or experience is based on customer insight or convenience. Honesty is the best policy.
A word to the wise #1: Don’t retro fit your brand to a product or experience only you want to launch. Hobby Horses make terrible pets. In the unlikely event you pull this off you won’t be so lucky next time around. You’ll be dragging your brand from pillar to post. Under the strain cracks will start to appear.
A word to the wise #2: At this stage you may realise that you don’t actually have a brand. If so you need to put the brakes on growth and go back to brand basics by answering the questions outlined in Table 1. This can be a painful and problematic experience but it will be time well spent.
How will we measure success?
When measuring brand-driven growth keep three points in mind:
- Be collaborative: Involve the c-suite from the outset. Ask what type of metrics they feel represent success and make it clear you want to align brand-driven growth with corporate objectives. C-suite engagement will help secure senior commitment that will be instrumental to your success.
- Measure cause and effect: For instance, if you have sales-focused corporate objective you need to identify product features and / or experience touch points (cause) that drive sales (effect). Regression can help do this. A more sophisticated approach would entail modelling mediating effects such as brand equity. For example, you could measure the influence specific experience touch points (cause) have on brand equity metrics (mediator) and then the influence brand equity metrics’ have on sales (effect). Structural equation modelling will help you do this.
- Assess brand, product and / or category fit: Methods such as multidimensional unfolding will help you identify which brands are perceived as being similar and in what way. This is powerful because prior to launching a new product or experience you’ll be able to objectively identify if another brand already owns the brand associations you’d like to leverage. In other words, you’ll know if another brand has already stolen your thunder.
Brand-Driven Growth: Case Studies
The AA was formed in 1905 with the goal of championing motorists – in particular to help drivers avoid police speed traps. The scope of the AA’s initial offer evolved to include route maps, star classifications and then breakdown cover. More recently they’ve stretched their brand into boiler cover, insurance (car, bike, home and home insurance) and even financial services. These all sit comfortably under the AA’s positioning of being there to keep customers prepared, if or when, things go wrong in life.
Caterpillar Tractor Company was formally established in 1925. The brand is famed for its robust, rugged and durable earthmoving construction equipment including tractor units, motor graders and off road dump trucks. More recently Caterpillar has licenced its brand in footwear, clothing, hats, luggage, watches, knives and even smart phones. This may seem like an odd move but all of these products are characterised by robust, rugged and durable design that lie at the heart the Caterpillar brand.
Babyshop’s brand positioning focuses on giving its customers the best choice at the right moment. Their instore and online “Baby Expert” service supports this positioning with aplomb. Babyshop used RFID technology to address stock availability issues and the brand has a carefully planned promotional calendar for cultural events e.g. Ramadan, Eid, Christmas and key times of the year e.g. salary weekends. Such initiatives ensure Babyshop customers have the best choice at the right moment.
Arm & Hammer
From the 1920’s to 1960’s Arm & Hammer built its brand around alternative uses for baking soda such as cleaning teeth. During the 1970’s Arm & Hammer repositioned the brand as a deodoriser that would help customers combat offensive smells. This decision saw the brand move into laundry detergent, deodorant, pet care, carpet cleaner and oral care and diaper disposal products. The notion that Arm & Hammer is a “natural, effective, environmentally-friendly and economical choice for taking care of every room in the house”5 is a consistent theme that runs through their decades of brand building.
Brand-driven growth: Pulling everything together
The blind pursuit of brand-driven growth can result in disjointed product portfolios and experiences that feel “off brand”. If not properly understood, brand-driven growth can actually do more damage than good.
Organisations that benefit from brand-driven growth follow the steps outlined in the Brand-Driven Growth Blueprint (BDGB). Their overarching approach is structured and aligns brand with corporate objectives. They also regard their brand as a common denominator that connects customers with the new products and / or experiences they launch.
The Brand-Driven Growth Blueprint is a practical management tool that provides a powerful platform for driving brand-driven growth in a structured and scalable way. Following the advice outlined in this article will go some way to helping you do the same.
- Financial Times (2019), New study from the FT and IPA finds that marketing budget holders lack confidence in building brands, 19thJune. View at https://on.ft.com/2xdbQkK
- Binet, L. & Field., P (2018) Effectiveness in Context: A Manual for Brand Building, IPA.
- Binet, L. & Field., P (2018) Effectiveness in Context: A Manual for Brand Building, IPA.
Binet, L. & Field., P (2013) The Long and the Short of it: Balancing Short and Long-Term Marketing Strategies, IPA. Sharp, B. (2010) How Brands Grow: What Marketers Don’t Know, Oxford University Press Romaniuk, J. & Sharp, B (2015) How Brands Grow: Part 2: Emerging Markets, Services, Durables, New and Luxury Brands, OUP Australia & New Zealand.
- The Board-Brand Rift: How Business Leaders Have Stopped Building Brands (2019). Financial Times / EFE Awards. Download report at http://bit.ly/32SCkn8
About the author
Managing Consultant, Wavelength Marketing
Dr. Darren Coleman is the Managing Consultant of Wavelength Marketing. Wavelength specialises in helping services brands drive growth and retain relevance through brand experiences. Dr. Coleman is also the author of Building Brand Experiences: A Practical Guide to Retaining Brand Relevance (Kogan Page).