The question to ask before anything else is does brand even matter at all? BAV Consulting, which has built the largest database that studies brands and consumers over the past 16 years, capturing data on over 43,000 brands on 72 dimensions, across a wide spectrum of categories has studied the impact of “Brand Strength”. This evaluates brands on several factors such as FINANCIAL: Market Share, Share Growth, Margin, Distribution, RISK: Credit Rating, BRAND EQUITY: Emotional Connection, Loyalty, Functional Performance, etc.
What BAV has found is that over the past 10+ years those that lead in “Brand Strength” have significantly outpaced the S&P 500 from a financial perspective (8.9% CAGR vs. 2.7% CAGR respectively).
In my career I have worked with over a dozen different brands and sub-brands and it’s shockingly clear the things that separate lagging brands from those that lead. Here are my top five:
1. IGNORE THE CONSUMER:
Brands should be obsessed with understanding and connecting with their consumers, their needs, their pain points, and their motivations. Brands cannot take for granted their most valuable consumers as these drive the greatest loyalty and provide the biggest opportunity for positive word of mouth. Brands that spend too much time focused on internal issues, organizational structures or looking over the fence at their competitor’s lawn all day will not be successful.
2. LACK FOCUS:
Regardless of if you are a start-up or a mature brand, if you have a $30MM advertising budget or $3,000, a brand’s vision must guide your action steps. This vision for the future must be inspiring and motivating to your team but also guide; how you prioritize your portfolio of sub-brands and products, the customers you will overinvest in, and your brands mission critical projects. If you don’t say “no” to certain activities, your brand and its people will not be able to execute with excellence.
3. SUBJECTIVE DECISION MAKING:
As the CEO of a company I once worked for said: “the most dangerous thing to an opinion is a fact”, we now operate in a time where data is more accessible than ever before. Over time, instincts can be honed from experience and be helpful to make quick decisions. However, when you start to ignore multiple data points that display a story, trouble is eminent.
4. POOR EXECUTION:
Easier said than done, but not having the right people in place to be subject matter experts and understand the important details of product, supply chain, distribution, communication, and finance can result in the crew not rowing the boat together. If you can’t deliver a superior experience to your stakeholders, it’s time to re-evaluate.
5. TOXIC CULTURE:
Everyone loves a good “Margarita Thursday” but when you boil it down culture = people. More than ever, diverse backgrounds lead to diverse thinking, if everyone “shares the same brain” there are dozens of land minds you’re able to miss. It’s important to have a blend of veteran & rookies that work and respect each other. Finding people with an open-minded perspective can help navigate through change and identify new solutions to solve problems. It’s also critical to look for people with a positive mental attitude, as they are more likely to be contagious (in a good way) keeping their peers positive. Finally, find people who like to have fun, while brands have a fiduciary responsibility, allowing individuals to joke around and be comfortable in their own skin helps build tremendous chemistry and ultimately tremendous value for your brand.
While even leading brands can be challenged from time to time and lose sight of the above five, over the long term, top-notch brands will course correct helping them consistently win in the marketplace.