Driving Profits

How the Love for a Brand Impacts on Profitability

You should be looking at your business through the lens of your brand.  Yes, the brand promise sets up how the external community views your brand whether that’s consumers, customers or key influencers. It’s the consistency in delivering the promise that connects consumers with your brand, both emotionally and rationally, letting it become a part of their lives. But equally so, brand becomes an internal beacon to help guide behaviour, decisions, action, structure and the formation of a culture. You should drive your growth and profitability through your brand, with a focus on driving share, enhancing price while managing costs and finding new markets.

 Consumer’s love is a source of power, changing the dynamic versus the channel, suppliers, competitors and even the consumers.
  • Consumers feel more and think less. It’s a part of them. They are fans, craving the brand and build it into their life. They can’t live without the brand.   It becomes easier to charge consumers a premium for your brand.  You can drive more sales per consumer creating a routine; you can easily convert them to a broader portfolio of your brands with new product launches.
  • The Channel needs the brand, caters to them, cannot stand up to them.  With a beloved brand, it becomes well known that consumers would switch customers before switching brands.  This leaves the channel less powerful in negotiations and will give the beloved brand preferential treatment.  Price increases, lower trade percentages, trade support and success of new launches all impact the P&L positively.
  • Suppliers are at the mercy of the brand.  In pure economics, the higher volumes give you efficiencies to drive down costs and increase your margins.  But even more, suppliers build their business completely around the brand and can’t get out.  Pushing the suppliers to cut costs has a big impact on COGs.
  • Agencies will want to be part of the brand.  Program costs should be more efficient not just on the volume but on agencies reducing their own margins/pricing in order to have your brand on their client roster.   At the agency, the best creative people will want to work on the beloved brand.  This can positively impact program costs—including lower fees, production costs or access to better talent.
  • It becomes hard for New Brands to break through.  New brand starts in the rational position making it difficult to break the emotional bond the Beloved Brand has created.  It has to be significantly better to even gain consideration because the consumer isn’t as rational as they are emotional in their decision making.  The Beloved Brand can maintain their share by holding on to the very loyal base of consumers.
  • No real Competitive Substitutes can match.   It becomes less about product and more about connection and how consumer feels though the brand. The Beloved Brand has a Monopoly on feelings.  Takes away ability to substitute to compete.  It’s less about rational points of difference, even going beyond the emotional differences that can be expressed.  It becomes about the experience and the perceptions.  The Beloved Brand can easily steal share, drive users to use more and even create new uses that directly impact the competitors within the scope of the Beloved Brand.
  • Special Treatment from Earned and influenced Media.  Traditional Media is more likely to give lower rates based on volume.  But they’ll look for alternative sponsorship or special arrangements for a brand that is loved.  They see the benefits of association and will push to have that brand part of their brand.  With the news media, the moves of Beloved Brand become newsworthy and will have an easier time gaining a return on a PR push.  Within the social media area, Beloved Brands are more likely to be liked, shared or searched.  This gives the Beloved Brand a much more efficient spending to sales ratios.
Most marketers will tell you that branding is about positioning. I think positioning is a means to driving growth and making money.

 

Other Beloved Brands Inc. White Papers