Brand strategy has been of great value to me – it’s been a lucrative career path for 20 years. But – full disclosure – I suffered from ‘Brand Strategy Imposter Syndrome’ for a number of years. Even when I was a senior brand strategist at one of the world’s most famous branding agencies, I was always nervous I’d be ‘called out’ somehow. And partly that was because I had no back-up. Great designs and logos? My agency had these in spades. Data, facts and research on why brand strategy was necessary for a business and how it impacted their bottom line? Tumbleweed…
So when I set up on my own I made sure I developed this back-up. Because many times on my 20 year journey I’ve had to explain why brand strategy is valuable for my clients. Typically not to CMOs – they get how it’s critical for all branding and marketing activities (but often don’t focus on its impact beyond this).
The challenge is usually convincing other members of the C-suite: the CEO, COO, CFO, CIO, CHRO… that brand strategy is not just a marketing tool. That it’s the foundation of how their business connects with the people who will make or break their business: customers and employees. That it impacts way more than brand identity and communications – that it should be shaping their HR, sales and innovation approaches, as much as it impacts their home page.
And if you want to be a confident brand consultant, you’ll need this back-up too. So I’ve pulled it together for you, so you can beat brand strategy imposter syndrome quicker than I did!
Why brand strategy is important
So how do you explain why brand strategy is important? Through the lens that speaks to all business leaders: VALUE.
On average, brand accounts for more than a third of shareholder value, according to Interbrand and JP Morgan, so anything that improves your brand should have a significant impact on a business’ bottom line. Now this value can vary by industry, as Jonathan Knowles points out in his article, ‘When is it true that “brand is our most important asset”?’ and trying to put a number on the value of a brand is incredibly difficult (as the discrepancies between brand valuation studies show). But most leaders are aware that brand is one of their most valuable intangible assets, that intangible assets account for 70% of the global economy, and hence brand contributes a substantial amount to their balance sheet.
But how does brand strategy directly impact the bottom line? Well brand strategy helps businesses grow in a multitude of direct and indirect ways. It’s not just a ‘nice to have’ element that brings consistency and clarity to branding and marketing. It’s real impact is on the main levers of business growth.
How brand strategy helps businesses grow
Ultimately there are two ways a business can grow without creating new products or services. By lowering or raising prices, or increasing the perceived value of what they already have.
Branding, and the brand strategy that underpins this, is all about increasing the perceived value of a product or service.
Sometimes it’s about defining your brand in a way that changes or expands the perceptions of the audience you want to reach. Just like Nike did in 1988 when they realised they’d become too narrow and elitist; that they were limiting their growth by talking only to elite athletes. The brief that led to the infamous slogan, ‘Just Do It’, read:
“We need to grow this brand beyond its purist core…We have to stop talking just to ourselves. It’s time to widen the access point. We need to capture a more complete spectrum of the rewards for sports and fitness.”
A New Brand World, 8 Principles for Achieving Brand Leadership in the 21st Century, Scott Bedbury
Often it’s about getting out of the weeds of product features and understanding how to ladder up to a bigger benefit and platform for your brand, to help you create more empathetic, premium associations in the minds of your target audience. Just like the Pampers team did in 1997 when they stopped talking just about dryness and focused instead on becoming ‘moms’ partner in every stage of their babies’ development.’ From being P&Gs poorest performer in terms of profitability and market share growth, they grew $1billion year on year with this more powerful brand strategy.
Defining this bigger benefit area is all about identifying WHY you exist. Which is one of the four questions you have to answer in your brand strategy. Jim Stengel, in his study of 50,000 brands over 10 years that led to his book, ‘Grow, How Ideals Power Growth and Profit At The World’s 50 Greatest Companies’, showed that the brands that identified a strong WHY statement collectively outperformed the S&P 500 by almost 400% and grew 3 times faster than competition. That’s a statistic that gets all the C-suite to sit up and take notice.
How brand strategy improves market share
The second thing I always share follows a conversation you have to have to ground people in what a brand actually is. Executives know that brand is an intangible asset – but what does this really mean?
Well, brands are built in people’s minds. They are just a set of perceptions, feelings and associations we have about a company or product. And in order to establish a brand in people’s minds, companies need to build a dense ‘mental network’ of these associations in the minds of their prospective customers. As IPSOS showed in their research highlighted in ‘Brands Don’t Buy Brands, People Do’, the more dense and connected these associations are, the larger your market share.
So how does brand strategy connect to this?
Simple. First you’ve got to figure out what you want those associations to be! What do you want to stand for in people’s minds? So when you spend all that money doing ‘stuff’ to build those associations – creating a brand identity, writing your ‘About’ page, running ads, briefing a customer service team, developing new products, presenting a keynote at your annual event – you ensure that they all hang together. They all connect to your brand strategy so they build dense connected associations in your customers minds.
How brand strategy improves customer loyalty, acquisition costs and preference
I often use this graphic to highlight the impact and importance of brand strategy.
Growing 3x faster than competition refers Jim Stengel’s study referenced above.
The 80% figures in my model comes from two sources. Firstly, a 2015 HBR study among 474 executives where 80% said that an organization with shared purpose will have greater customer loyalty.
Secondly, a pwc study that showed that 80% of consumers prefer to buy goods and services from companies that stand for a shared purpose that reflects their personal values and beliefs.
Both of these track back to answering that first question in a brand strategy – what most companies today call their purpose or mission – but is just the answer to WHY you exist.
The other metric I use here is around customer acquisition costs. A study by Rokt, highlighted in this HBR article, ‘4 Factors Separating the Top Marketers From the Rest of the Pack’, identified that a strong brand outperforms weaker ones by 3:1 in terms of customer acquisition costs. As they highlight,
“Choosing one product over another is ultimately powered by the consumer’s emotional relationship with the brand. We see companies with strong brands outperform weaker brands in the same industry by 3:1 in terms of customer acquisition costs (CAC). Many businesses miss the link between brand and performance entirely. They underinvest in brand because outcomes are not as easily measured. This is the challenge when the approach is laser-focused on short-term performance metrics versus long-term shifts in brand strength.”
