Is brands’ importance dwindling? Are consumers thinking about your brand? Are organizations that sweat to differentiate themselves in cluttered markets wasting their money? Brands are supposed to have the power to provoke, instigate, incite and inspire, enlighten and stimulate, agitate, stir up and encourage, urge and edify the consumer and are often worth much more than a company’s physical assets. Today brand equity accounts for 30% of the S&Ps value, but pundits have been fomenting about the irrelevance of brands and their role since the digital revolution started.
Ubiquity of computers and smart devices in an age of “perfect information” challenges the role of brands and how they’re built. Do brands make it easier for customers to cut through the bombardment that drowns us every day? Research reveals that receive more than 3,000 commercial images a day; our subconscious absorbs more than 150 images and roughly 30 reach our conscious mind. Therefore, practice has it that if you differentiate your brand you dramatically accelerate the potential for your brand to reach the conscious mind of the consumer.
The ability for customers to research reviews on websites, chat with people through social media and review websites like Trip Advisor before they buy products has dramatically reshaped the customer journey. According to a new book by Simonson and Rosen these trends simply make brands not as valuable as they used to be because the consumer has become more informed and rational in their decision making process and need brands less, especially as word-of-mouth is the No. 1 purchase decision-maker.
The old purchase funnel is dead. Consumers still want a clear brand promise and offerings they value. What has changed is when, at what touch points, they are most open to influence, and how you can interact with them at those points. In the past, marketing that put the lion’s share of resources into building brand awareness and then opening wallets at the point of purchase worked pretty well. But touch points have changed in both number and nature, requiring a major adjustment to realign marketers’ strategy and budgets with where consumers are actually spending their time. To best serve today’s consumers, companies need to enhance their Internet presence and encourage word of mouth with more consumer feedback before and after a purchase especially as many products marketed to men are bought by women and vice versa.
Perhaps still the best definition of the word brand, from a 1998 copy of Webster’s dictionary, was “to mark with a red hot poker” and in many ways it’s still spot on because brands need to be red hot in this Darwinian new world of social media and empowered consumers who now can prolifically communicate with each other and form the all powerful court of public opinion. Recent research by McKinsey & Co has shown that consumers do not systematically hone down their choices, but take a more recursive and less reductive approach.
Today the consumer goes through a rigorous consideration phase followed by evaluation of the brands chosen and the selection/decision to buy. After purchase the customer enjoys the service, advocates the brand to their peers, bonds with the brand and swoops round to purchase. If not bonded the process starts over and moves back into consideration. This has huge implications for the delivery of brand marketing especially as consumers today take all the brands they have under consideration right to the point of purchase so a brand being a short cut to a consumers purchase is a lot harder to accomplish.
If you don’t like change you’ll like irrelevance even less. The dawn of “social sharing” is transforming the economics of marketing and the Internet has upended how consumers engage with brands making obsolete many of the brand’s traditional strategies and structures.The Internet has upended how consumers engage with brands. It’s transforming the economics of marketing and making obsolete many of the brand’s traditional strategies and structures. For marketers, the old way of marketing their business is unsustainable. The purpose of brands has changed. Brands will succeed mainly by inspiring customer loyalty, but prior to loyalty being built, brands need to both aid brand recognition in the market and influence what customers associate with the brand such as speed, reliance and status.
People do care about brands, just not as many as we’d like to think and brand value is rising. The presiding confluence of economics, culture, and history intertwine creating consumer’s who desire a reciprocal relationship and new thresholds that bring to the fore new brand leaders with a more progressive outlook. The timing is ideal for brands to seize this opportunity to take on decisive role, establishing an even stronger position in society and taking consumer’s experience with the brand deeper into the core strategy of the business – not just a pure sales play.
What it takes is a “fans first” philosophy that guides the brands overall engagement strategy. This represents a move away from push advertising toward a model of listening and engaging where appropriate. So the challenge to a brand strategy that desires to be everywhere customers are, and in the social space, is how to achieve it in a non-big brand way. What we search for in brands is not so far from what we search for in friends: brands are personalities and the more CMOs care about their brand’s role in society, share benefits with their community and really listen and engage their customers to compete to get what they want fewer CMOs will get fired less and they’ll get more bang for buck from their brand marketing dollars.