Here are 4 simple steps to quickly uncover your brand’s profit situation

A brand leader needs to be able to quickly look at P&L statement to assess your brand’s profit situation. You need to be able to quickly assess your brand’s sales growth, margins, and marketing spend levels.brand profit

Anyone who does not include profit in their definition of a brand has never run a branded business before. To me, a product is a basic commodity you sell. A brand creates a bond that leads to a power and profit beyond what the product alone can achieve.

If you want to succeed in brand management, you have to understand brand finance. After all, you are running a business. If you just like the activity of marketing, then you should become a subject matter expert, because if you cannot work the finances of your brand, you will not get promoted past brand manager.

A quick dissection of the financial statement

So if finance is not a natural skill, when your finance manager hands you the brand’s profit and loss (P&L) statement, it can be rather intimidating. To assess the performance of your brand, and begin knowing where to dig deeper, I recommend you break it down by looking at four key numbers.

1. Growth Rate

As a leader of the brand, I start by trying to understand the growth rate. Most brand leaders have brand growth as their number one objective. You can do a quick calculation to figure out the average growth rate but, as you dig in, you should try to find out what happened each year to give you a better feel of the brand performance. There are two calculations you can use, either average growth rate or compound annual growth rate (CAGR).

    • In this example, the average growth rate is 7% and CAGR % is 9.1%, but very high compared to the overall economic growth of 2-3%. My first instinct would be to look at the category growth to see if the brand is gaining or losing market share.
    • Next, the year-by-year growth shows the growth rate has shot up to 12% over the past two years. I would make a mental note to expect to see this as an investment brand and determine whether the profit is paying off yet.

2. Gross Margin Percentage

My eye is drawn immediately to figuring out the gross margin percentage, as the first signal of the health of the brand or to try to understand the strategy behind the brand. Divide the absolute gross margin by the sales. You can assess the brand’s health by comparing the margin percent over time to see the trend line, with other brands in your portfolio to assess the opportunity cost, or with other competitive brands in the category. 

  • In this example, the gross margin percentage has fallen from 43% in 2018 down to 37% in 2020, which should prompt you to go a layer deeper to look at price and cost of goods.
  • Regarding price, dig around to see if there has been an average price decrease, then look to see if it is due to an increase in trade spend, a shift in the sales mix to lower-priced items, or even a shift to lower margin items.

3. Contribution Margins

Next, look at your brand’s cost of goods and impact on overall profit. Some cost factors are outside the brand’s control, such as foreign exchange, raw material cost increases, duties, and transportation costs. However, you also need to look out for factors within the brand’s control. Was there a strategic decision to change to a higher cost raw material? Was there increased quality control at the manufacturing site? Did you switch to a more expensive supplier or change the location of your production?

  • Look at contribution margin percentage, dividing the bottom line contribution income by the overall sales.
  • In the example, an alarm bell goes off when I see the contribution margin percentage has fallen from 26% to 17% in three years. My first observation is the sales are up dramatically, yet both the gross margin percentages and contribution margin percentages are down. 
  • While the gross margin percentage is down, the gross margin dollars increased. However, in this case, the contribution margin dollars have gone down from $5,763 to $4,772. After two years of investment, the brand is not responding fast enough to cover that spend level.    

4. Marketing spend growth rate

Finally, look at the comparison between the sales growth rate and the marketing spend growth rate

  • While sales are growing at 12% over the past two years, spending is up 22%. The brand is not covering the spending increase. Dig in to understand if the payback was expected to be slower. If not, I would dig in to explain why it is not paying back: not the right message, competitive activity, or market dynamics.

Here is a training workshop we call Brand Finance 101, the ideal training for any brand manager.

 

To learn more about this type of thinking, you should explore my new book, Beloved Brands.

With Beloved Brands, you will learn everything you need to know so you can build a brand that your consumers will love.

You will learn how to think strategically, define your brand with a positioning statement and a brand idea, write a brand plan everyone can follow, inspire smart and creative marketing execution and analyze the performance of your brand through a deep-dive business review.

Beloved Brands book

To order the e-book version or the paperback version from Amazon, click on this link: https://lnkd.in/eF-mYPe

If you use Kobo, you can find Beloved Brands in over 30 markets using this link: https://lnkd.in/g7SzEh4

And if you are in India, you can use this link to order: https://lnkd.in/gDA5Aiw

Beloved Brands: Who are we?

At Beloved Brands, our purpose is to help brands find a new pathway to growth. We believe that the more love your brand can generate with your most cherished consumers, the more power, growth, and profitability you will realize in the future.

We think the best solutions are likely inside you already, but struggle to come out. Our unique playbook tools are the backbone of our workshops. We bring our challenging voice to help you make decisions and refine every potential idea.

We start by defining a brand positioning statement, outlining the desired target, consumer benefits and support points the brand will stand behind. And then, we build a brand idea that is simple and unique enough to stand out in the clutter of the market, motivating enough to get consumers to engage, buy and build a loyal following with your brand.

We will help you write a strategic brand plan for the future, to get everyone in your organization to follow. It starts with an inspiring vision that pushes your team to imagine a brighter future. We use our strategic thinking tools to help you make strategic choices on where to allocate your brand’s limited resources.

Our brand playbook methodology will challenge you to unlock future growth for your brand

  1. Our deep-dive assessment process will give you the knowledge of the issues facing your brand, so you can build a smart plan to unleash future growth.
  2. Find a winning brand positioning statement that motivates consumers to buy, and gives you a competitive advantage to drive future growth.
  3. Create a brand idea to capture the minds and hearts of consumers, while inspiring and focusing your team to deliver greatness on the brand’s behalf.
  4. Build a brand plan to help you make smart focused decisions, so you can organize, steer, and inspire your team towards higher growth.
  5. Advise on advertising, to find creative that drives branded breakthrough and use a motivating messaging to set up long-term brand growth.
  6. Our brand training program will make your brand leaders smarter, so you have added confidence in their performance to drive brand growth.

To learn more about our coaching, click on this link: Beloved Brands Strategic Coaching

To learn more about our training programs, click on this link: Beloved Brands Training

If you need our help, email me at graham@beloved-brands.com or call me at 416 885 3911

You have my personal promise to help you solve your brand building challenges. I will give you new thinking, so you can unlock future growth for your brand.

Signature

Graham Robertson

Founder and CMO, Beloved Brands Inc.

 

 

8 simple ways that Brand Leaders can impact Profits

The more love you can create for your brand, the more power and profits you can generate. At Beloved Brands, it is our belief that marketers need to create more love for their brand, but not just for loves sake, but for the sake of profit.  Love = Connection + Power + Profit. That bond between your brand and your consumer becomes a source of power for your brand, whether that power is with the very consumers who love your brand, versus retailers, suppliers, competitors, influencers, employees or even versus the media. Once you’re able to generate power for your brand, you can then turn that into profit, whether driving price, cost control, market share or increasing the market size. 

 

Driving Profit

While good marketers can run brands and marketing programs.  Great marketers can drive their brands P&L and deliver growth and profit for their brands.  Here are  eight ways the Brand Leader can drive profits:

  1. Pricing
  2. Trading the consumer up or down
  3. Product Costs
  4. Marketing Costs
  5. Stealing other users
  6. Getting current users to use more
  7. Enter new categories
  8. Create new Uses for your brand 

1.  Pricing

While many marketers think of price as a defensive reaction, most times to counter inflation or something happening in the trade channels, marketers should refocus and start using price as a weapon to drive Brand Value. Beloved Brands seem more capable at driving profits through pricing, but they also are careful to ensure the premium does not become excessive to create backlash.

  • Price Increase: You can do a price increase if the market or brand allows you. It likely has to be based on passing along cost increases. Factors that help are whether you are a healthy brand or it’s a healthy market as well as the power of your brand vs. competition and channel.
  • Price Decrease: Used when fighting off competitor, if you need to react to a sluggish economy or channel pressure. Another reason to decrease price is if you have a competitive advantage around cost, whether that’s manufacturing, materials or distribution.

There are watch outs for price changes. It’s difficult to execute especially if it has to go through retailers. You need to understand power relationships–how powerful are the retailers. Many times, price changes are scrutinized so badly by retailers that you must have proof of why you are doing it. It’s likely your Competitors will over-react. So your assumptions you used to go with the price increase will change right after. And finally, it’s not easy to change back.

2.  Trading the Consumer Up or Down

Aside from price increases, another strategy would to create a range of products that allows you to reach up or down to a new set of consumers.  You need to ensure that you are doing this for the right reason or it could backfire on you.  

  • Trading Up: If you have a range of products, sometimes it can be beneficial to get consumers to trade up. Can you carve out a meaningful difference to create a second tier that goes beyond your current brand? Do your brand image/ratings allow it?
  • Trading DownRisky, but you see un-served market, with minimal damage to image/reputation of the brand. In a tough economy, it might be better to create a value set of products rather than lower the price on your main products.

There are a few watch outs around trying to trade up or down: Premium skus can feel orphaned at retail world—on the shelf or missing ads or displays. Managing multiple price levels can be difficult—what to support, price differences etc. For all the effort you go to, make sure your margins stay consistently strong through the trading up or down. Be careful that you don’t lose focus on your core business. You can’t be all things to everyone. The final concern is what it does your Brand’s image, especially risky when trading downward.

3.  Product Costs

Managing cost as a weapon to enhance the Brand’s Value. It can be either your cost of goods or the marketing costs.  As marketers, we sometimes think cost is someone else’s job.  But it’s an effective weapon that marketers should be utilizing.  

  • Cost of Goods Decreases: You are able to use the power of your brand to drive power over your suppliers; you find cheaper potential raw materials, process improvement or find off-shore manufacturing.
  • Cost of Goods Increases: Make sure that you manage the COGs as they increase. Watch out for suppliers trying to pass along costs. But realize that with new technology, investing in brand’s improved image, going after premium markets, offering new benefit or a format change, that cost of good increases could be a reality.

The watch outs with managing costs: with cuts, make sure the product change is not significantly noticeable. You should understand any potential impact in the eyes of your consumer on your brand’s performance and image. Can the P&L cover these costs, either increased sales or efficiency elsewhere? Managing your margin % is crucial to the long-term success of your brand.

4. Marketing Costs

As marketers sometimes we get protective of the amount, hoping to have as much money as we can to carry out the activities on our priority lists.  But we should be looking at marketing costs from the view point of the CEO, with a focus on making sure every program drives profit.  

  • Marketing Cost Decrease: To counter changes in the P&L (price, volume or cost), it’s very tempting to look to short-term P&L management or look at changes in go-to-market model. Where a brand stands on the product life cycle or how loved the brand is can really impact the selling costs. Even though we think that Beloved Brands have endless spending, they actually likely have a lower investment to sales ratio.
  • Marketing Cost Increase: When you’re in Investment mode, defensive position trying to hold share against an aggressive competitor or when you see a proven payback in higher sales–with corresponding margins.

Always be in an ROI mindset: Manage your marketing costs as though every DOLLAR has to efficiently drive sales. Realize that short-term cuts can carry longer term impact. Competitive reaction can influence the impact of investment stance–like a price change, your competitor might over-react to your increases in spending.

5. Stealing other Users

Externally, the Share and Volume game are traditional tools for brand. Either stealing other users or getting current users to use more.

  • Offensive Share Gains: Use it when you have a significant Competitive Advantage or you see untapped needs in the market. Or opportunistic, use first mover advantage on new technology.
  • Defensive Share Stance: Hold the fort until you can catch up on technology, maintain profitability, loyal base of followers needs protecting.

Be careful when trying to gain share. A Beloved Brand has a drawing power where it does gain share without having to use attack modes. Attacking competitors can be difficult. It could just become a spend escalation with both brands just going at it. After a share war that’s not based on a substantive reasoning (eg. technology change), there might end up with no winners, just losers. Many times, the channel will try to play one competitor against another for their own gain. Watch out what consumers you target in a competitive battle: some may just come in because of the lower price and go back to their usual brand.

6. Getting users to use more

Going after frequency is a different strategy.  

  • Share of Requirements:  In many categories, even loyal consumers will work within a competitive set of favourite brands. A good strategy is to provide a reason (claim, experience, emotion) for loyal consumers to stay with your brand.  
  • Get Current Users to Use More: When there is an opportunity to turn loyal users into creating a potential routine. Changing behaviours is more difficult than enticing trial. It’s a good strategy to use, when your there’s real benefit to your consumer using more. It’s hard to just get them to use more without a real reason.

There has to be a real benefit connected to using more or it might look hollow/shallow. Driving routines is a challenge. Even with “lifesaving” medicines, the biggest issue is compliance. Find something in their current life to help either ground it or latch onto. When I worked on Listerine, people only used mouthwash 20-30 times a year compared to 700+ brushing occasions. So we focused on connecting rinsing with Listerine to the twice daily brushing routine.

7. Enter new categories  

When there is an untapped or under-served need. There could be a significant changing demographic that impacts your base. Or you are able to translate/transfer your reputation to a new user group. There should be something within your product/brand that helps fuel the brand post trial. Trial without repeat, means you’ll get the spike but then bust. Substantial investment required. Don’t let it distract from protecting the base loyal users.

8. Create new uses

Format Line Extensions that take your experience or name elsewhere. Able to leverage same benefit in convenient “on the go” offering. Make sure current brand is in order before you divert attention, funding and focus on expansion area. Investment needed, could divert from spend on base business. Be careful because the legendary stories (Arm and Hammer) don’t come along as much as we hope.

Beloved Brands drive strong sales growth, which helps the P&L work harder and more efficiently.

With all the love and power the Beloved Brand has generated for itself, now is the time to translate that into growth, profit and value. The Beloved Brand has an Inelastic Price. The loyal brand fans pay a 20-30% price premium and the weakened channels cave to give deeper margins. We will see how inelastic Apple’s price points are with the new iPad Mini. Consumers are willing to trade up to the best model. The more engaged employees begin to generate an even better brand experience. For instance at Starbucks, employees know the names of their most loyal of customers. Blind taste tests show consumers prefer the cheaper McDonald’s coffee but still pay 4x as much for a Starbucks. So is it still coffee you’re buying?

A well-run Beloved Brand can use their efficiency to lower their cost structure. Not only can they use their growth to drive economies of scale, but suppliers will cut their cost just to be on the roster of a Beloved Brand. They will benefit from the free media through earned, social and search media. They may even find government offer subsidies to be in the community or partners willing to lower their costs to be part of the brand. For instance, a real estate owner would likely give lower costs and better locations to McDonald’s than an indifferent brand. Apple get a billion dollars worth of free media, with launches covered on CNN for 2 weeks prior the launch and carried live like it’s a news event.

Beloved Brands have momentum they can turn into share gains. Crowds draw crowds which spreads the base of the loyal consumers. Putting the Disney name on a movie generates a crowd at the door on day 1. Competitors can’t compete–lower margins means less investment back into the brand. It’s hard for them to fight the Beloved Brand on the emotional basis leaving them to a niche that’s currently unfulfilled. Walk past an Apple store 15 minutes before it’s open and you’ll see a crowd waiting to get in–even when there are no new products.

Beloved Brands can enter into new categories knowing their loyal consumers will follow because they buy into the Idea of the Brand. The idea is no longer tied to the product or service but rather how it makes you feel about yourself. Nike is all about winning, whether that’s in running shoes, athletic gear or even golf equipment

profit chart

Here are lessons learned for driving more profits for your brand.

  1. Higher volume helps you exert pressure on costs. That could be supply costs, operations costs, and distribution over even media costs.
  2. Get more for less from the trade. You can begin exerting power over the sales channels to your advantage–trimming variable trade costs with retailers while demanding more display, prime real estate, coop advertising and more control over pricing. ROI on trade programs.
  3. Smarter more efficient management: manage your inventories, meet customer expectations, control pricing and drive cheaper costs.
  4. Growth means you start outgrowing any fixed costs. This includes start-up costs, sales force, product plants or R&D costs.
  5. Lower cost of capital: More certainty means lower risk and you can re-invest, knowing the ROI will be quicker and stronger.

 Love = Power + Profit

 

 

How loved is your brand?

We believe a brand’s source of power is the emotional feelings it generates. With that power comes added profitability.

In the consumer’s mind, brands sit on a Brand Love Curve, with brands going from Indifferent to Like It to Love It and finally becoming a Beloved Brand for Life. At the Beloved stage, demand becomes desire, needs become cravings, thinking is replaced with feelings. Consumers become outspoken fans. It’s this connection that helps drive power for your brand: power versus competitors, versus customers, versus suppliers and even versus the same consumers you’re connected with. The farther along the curve, the more power for the brand. It’s important that you understand where your brand sits on the Love Curve and begin figuring out how to move it along towards becoming a Beloved Brand. With the power of connection, the brand can leverage that power into increased growth and profits. To read more, follow this presentation.

 

How to manage your Marketing career from ABM to CMO

At every level you have to adjust to the new role. Brand Managers fail when they keep acting like ABMs and Directors fail when they keep acting like Brand Managers and VPs fail when they don’t know what to do.  In a classic marketing team, the four key roles are Assistant Brand Manager up to Brand Manager then up to Marketing Director and on to the VP Marketing role.

Marketing roles by level

In simple terms of each of the roles, here’s a how to for all four levels:

  • Assistant Brand Manager: It’s about doing; analyzing and sending signals you have leadership skills for the future. It’s not an easy job and only 50% get promoted to Brand Manager. To read a story on how to be successful as an ABM, click on the following hyper link:  How to be a Successful ABM and get Promoted
  • Brand Manager: It becomes about ownership and strategic thinking within your brand plan. Most Brand Managers are honestly a disaster with their first direct report, and get better around the fifth report.  The good ones let the ABM do their job; the bad ones jump in too much, frustrated and impatient rather than acting as a teacher. To read about being a successful Brand Manager, read:  How to be a Successful Brand Manager
  • Marketing Director: It’s more about managing and leading than it does about thinking and doing.  Your role is to set the standard and then hold everyone to that standard. To be great, you need to motivate the greatness from your team and let your best players to do their absolute best. Let your best people shine, grow and push you. Follow this hyper link to read more: How to be a Successful Marketing Director
  • VP Marketing or CMO: It’s about leadership, vision and getting the most from people. If you are good at it, you won’t need to do any marketing, other than challenging and guiding your people to do their best work. You have to deliver the results, and very few figure out the equation that the better the people means the better the work and in the end the better the results. Invest in training as a way to motivate your team and keep them engaged. Use teaching moments to share your wisdom. Read the following article for how to be a success:  How to be a Successful VP of Marketing

One thing to keep in mind is the Idiot Curve which shows up at every level. The basic rule of the Idiot Curve is: You get dumber before you get smarter. When you first land the ABM job, there’s just so much to learn, it’s like drinking from a fire hose. I find it takes 3 months to get back to being just as smart as you were on the first day. It’s over-whelming at first, and yet you see all these other ABMs doing it so that’s even more intimidating. But the idiot curve is inevitable. It just shows up differently for each person. No matter how hard you fight it, you have to ride the curve. (But, please fight through the curve; you have to for your survival)  The Idiot Curve normally lasts up to 3 months, and then things just start to click. And you’ll experience it in a new and exciting way you can’t even predict. 

slide123But the Idiot Curve shows up again in the first few months of each level. In the first few months as a Brand Manager, they keep doing the ABM role because that’s what they know. They frustrate the hell out of their ABM. They keep recommending and acting small rather than start deciding and stepping up to the leadership role. At the Director role, they continue to be the Brand Manager. They get nervous where they shouldn’t, whether it’s with senior people in other functions or even within marketing. They prefer to keep doing, and in those moment there is nothing “to do”, they walk around and start doing other people’s jobs. At the VP level,the first few months are lonely as you no longer have peers you can bounce ideas off. Your peers assume you can do the job, and they don`t want to hear your problems. At each level, you secretly feel like an Idiot. You don’t want it to show, but in a way, you should use it to your advantage.

Marketing Values for All Levels

There are core marketing values you should instill and use throughout your career:

  1. Be Consumer Focused: Everything Starts and Ends With the Consumer in Mind. Put yourself in the shoes of the consumer and think like them. Steve Jobs said he never needed research, but he must have been amazing at listening, observing and anticipating how the consumer would react. I’d still recommend you do research, but go beyond the statistics of the research and learn how your consumer thinks. Whenever I go to focus groups, I watch their faces. And when the research results come back you always have to ask “so now what do we do”. The research helps you, but never gives you the exact answer. Match up the needs of the consumer to your brand assets to figure out your ideal brand positioning. The best marketers represent the consumer to the brand, NOT the brand to the consumer. I always believe that consumers are selfish and deservedly so because they have money to spend. As a consumer, I don’t care what you do until you care about what I need.  Focus on them, not on you.
  2. Follow Your Instincts: Gut Feel of Marketing: Listen to your inner thoughts, they are in there. Too many times people fail because “they went along with it even though they didn’t like it”. The problem is that sometimes your instincts are hidden away. You get confused, you feel the pressure to get things done and you’ve got everyone telling you to go for it. You get scared because you’re worried about getting promoted and want to do the ‘right thing’. But your gut is telling you it’s just not right. My rule is simple:  if you don’t love the work, how do you expect the consumer to love your brand. The worst type of marketer is someone who says “I never liked the brief” or “I never liked the ad”. If you blame your agency or team after the fact, I have a word for people like you: ”useless”.
  3. Revel in Ambiguity: Be Patient with Ideas.  Never be afraid of an idea and never kill it quickly.  Watch the signals you send that make suck the creativity out of your team.   If you become too predictable to your team, then your work in the market will also become predictable.  Ambiguity and time pressure usually work against each other.  Don’t ever settle for “ok” just because of a deadline.  Always push for great. What I have found is the longer I can stay comfortable in the “ambiguity zone” the better the ideas get whether it’s the time pressure that forces our thinking to be simpler or whether it’s the performance pressure forces us to push for our best idea, I always say, the longer I can hold my breath, the better the work gets.
  4. You Run the Brand, Don’t Let the Brand Run You: Be thoroughly organized, well planned and know the pulse of your business. Every six months, I would find a quiet time to answer five key questions that would help me stay aware: 1) Where are we? 2) Why are we here? 3) Where could we be?  4) How can we get there? and 5) What do we have to do to get started? In an odd way, the more planning you do, the more agile you’ll be, because you’ll know when it’s ok to “go off plan”  Stay in Control: Hit the Deadlines, don’t give the appearance that you’re not in control. We have enough to do, that things will just stockpile on each other. Know your Business and don’t get caught off-guard.  Make sure you are asking the questions and carrying forward the knowledge. Enjoy doing the monthly report because it makes you the most knowledgeable about the brand. Stay conceptual; avoid getting stuck in the pennies or decimals.Process should enable us, not hinder us: A good process can force your thinking towards a solution. If it restricts your thinking, it’s not a good process. But if it means, you free up your time for strategic thinking, instead of format thinking, we’ll move much faster.
  5. Be the Brand Leader not the Follower: The more you keep your boss informed the more rope they may give you. If they don’t know what you’re doing, they may clamp down and micro-manage you. . Ensure a policy of open communication with no surprises: Make sure you keep your team informed and involved. Keep senior management informed. You must be the champion of the brand. The best ideas are those that erupt out from the brand team–not from a top down perspective. You have to be a self-starter that pushes your idea through the system, in the face of resistance or doubt.  And you will meet resistance from so many people in the system. All the best work I ever did met a large degree of resistance. You have to anticipate this and work through it. One subtlety to ownership is your tone. When you don’t know something, speak in an “asking way” and openly seek out the wisdom and advice of your agency, your manager or your peers. Put your ego aside and listen. But equally, when you do know the answer, speak in a “telling way” that gets others to follow you, including senior management.
  6. Speed, Simplicity and Self Confidence: a) Speed: We don’t do things fast for the sake of it; we do things fast so we can take advantage of opportunities that have a window. If you recognize an opportunity, realize that others are also recognizing the same opportunity. So speed to market can enable you to win before they get there. Also, doing things fast does not mean sloppy. b) Simplicity: I’ve always said, “If you have a complex answer to something, odds are you are wrong”.  Keep it simple enough to explain, and so that the people who need to execute our ideas can really execute them. c) Self Confidence: As the brand leader, speak your mind. After all, we are all just walking opinions. Find a way within your leadership style to engage your team, agency or your boss in a debate to get to better answers.

BBI ads for 2015.003

Beloved Brands: Who are we?

At Beloved Brands, we promise that we will make your brand stronger and your brand leaders smarter. We can help you come up with your brand’s Brand Positioning, Big Idea and Brand Concept. We also can help create Brand Plans that everyone in your organization can follow and helps to focus your Marketing Execution. We provide a new way to look at Brand Management, that uses a provocative approach to align your brand to the sound fundamentals of brand management. 

We will make your team of Brand Leaders smarter so they can produce exceptional work that drives stronger brand results. We offer brand training on every subject in marketing, related to strategic thinking, analytics, brand planning, positioning, creative briefs, customer marketing and marketing execution. 

To contact us, email us at graham@beloved-brands.com or call us at 416-885-3911.You can also find us on Twitter @belovedbrands. 

Positioning 2016.112

How to write the ideal Monthly Report for your brand.

In a world of big data and analytics, every brand should have a monthly report to track how the brand is doing through the course of the year. While these reports can feel tedious to write, the 3-4 hours it takes to dig in is a good investment in discipline, knowledge as well as maintaining that touch-feel of managing the brand.monthly report

The report serves as a guide for all those across the company to stay on track with the annual plan everyone is committed to delivering. It gives senior management awareness of the grass-root issues, it enables course correction decisions at the senior levels, it exposes weakness and risk. It should carry action statements within the document that serves as a mini-version of the brand plan. And finally, it gives everyone a sense that the brand team has full control of what’s happening on delivering the plan.

Consumption Section

The monthly report should answer the following CONSUMPTION questions:

  1. What’s the one-line story that captures what’s happening on the brand? This is your elevator speech for the CEO.
  2. What’s the dollar, tonnage or unit share, on a 4-week, 12 -week and YTD basis? Focus on the share that the company uses–it can vary. Having all 3-time breaks allows people to see the trends.
  3. How’s the brand doing vs year ago, prior periods, vs the category or vs plan for the year? Speak in terms of both % and share point changes. Theory of relativity allows you to tell the story better.
  4. What’s the competition doing? Trends in the consumption, tracking results related to their brand funnel or potential action that’s rumored in the marketplace.
  5. What are the top 3 drivers of the brand for the month or year? It can be a combination of consumption trends (sku, regions, channel, account, flavor etc), beneath the surface Brand Funnel scores, program results that are contributing to share, competitive moves. Explain how you’re going to continue these going forward.
  6. What are the 3 inhibitors and what are you doing about it? These are things that are holding back the brand. Expose weaknesses you’re seeing in the programs, potential distribution gaps, competitive moves that are beating you, changes in consumer behavior etc. Explain what you plan to do about it, giving the assurance that you are running the brand.

Sales section

The monthly report should answer the following SHIPMENT questions:

  1. What’s the one-line story that captures what’s happening on the brand? This might be the story that you know you could back up when confronted by the VP of sales in the same elevator. If it’s bad news, they will have to answer to the CEO.
  2. What’s the overall sales for the month, the quarter and how will it impact the year-end call? Senior management might adjust their own forecast or may change their short-term investment stance based on that performance.
  3. How are the sales by key account, by skus or by regions? Track on both the month and on a YTD basis. This highlights the strength and exposes weakness.
  4. What are the top 3 drivers of the brand for the month or year? You want to highlight the accounts, skus or regions that are showing the most growth, explain why and tell what you’re going to do to keep these going.
  5. What are the 3 inhibitors and what are you doing about it? These are things that are holding back the brand. While the sales numbers are on the chart, start to explain the top line of what’s happening. Connect with the Account lead, ensuring they buy into the statement you’re about to put. This gives you a chance to stay connected to what’s happening on each account. If your account people aren’t great at getting back to you, saying “I’m about to write a monthly report for the President and I want to know what’s going on at your account”. They’ll get back to you. Also, you need answers in the report to show that you are trying to get as much out of the brand as you can. Both short and long-term.

Digging in on the data 

As you are analyzing the mounds of data in front of you, you want to dig in everywhere that you can.

  • Start at the 4-week share for the brand overall, compare it to the 12-week, then the 52-week and see the major trend. This is the start of the story. Dig deeper on regions, channels, and skus, figuring out the relative differences you start to see–either on the overall share basis (development index) or on the overall growth rate. Do the same with major competitors. That should give you the basis of your 4-week story and you can begin the document.
  • You next want to focus on the performance for the overall year. With both consumption and share, you want to give management a good forecast on what you think will happen. This can be in consultation with sales and your demand teams. The story has to be consistently told and shared with the senior leaders. If they sense a disconnect, it will look bad on you.
  • If you have good tracking studies, dig in on program tracking (advertising, sampling, in-store, professional recommendations etc) any brand funnel tracking (awareness, trial, repeat, U&A) that can support what’s happening on the consumption and shipments.
  • Drivers and Inhibitors are things that are happening in the market, not things that could happen. Ideally, they should match up to the Annual Brand Plan and the objectives of the brand. Think of these monthly reports like 1/12th of your brand plan–not only highlighting how the brand is doing, but what you are willing to do about it.
  • Keep it all on one page, forcing your writing style to be more direct. A senior leader should be able to digest it in 10 minutes.

Writing the report

When I was an Assistant Brand Manager, I dreaded having to do the Monthly Report. It was a chore that cut into my life. It took all day to find the data. Even all night. I always wondered if anyone would ever read my report. And, I was awful on my first few attempts. I kept thinking if I can just get promoted to Brand Manager, I will no longer have to ever write a Monthly Report ever again. After a year, I became a master of the report. When I did get promoted to Brand Manager, I re-wrote it for my boss. And when I made it up to the VP level, I read everyone’s report in detail, even sending back inquiry questions for each of the 15 brands I had under me. I started to do my own version of the report for the regional President. I dug in the same way I had at the junior levels and crafted the story. Not only did it project a sense of control over my business, it allowed me to sleep better because I knew what was going on with my business. I actually was in control.

I’ve always believe “You run the brand. Don’t let the brand run you.”

When we get out of control, the brand starts to run us. It takes over.

Here’s our training workshop we run on creating a business review for your brand:

To learn more about this type of thinking, you should explore my new book, Beloved Brands.

With Beloved Brands, you will learn everything you need to know so you can build a brand that your consumers will love.

You will learn how to think strategically, define your brand with a positioning statement and a brand idea, write a brand plan everyone can follow, inspire smart and creative marketing execution and analyze the performance of your brand through a deep-dive business review.

Beloved Brands book

To order the e-book version or the paperback version from Amazon, click on this link: https://lnkd.in/eF-mYPe

If you use Kobo, you can find Beloved Brands in over 30 markets using this link: https://lnkd.in/g7SzEh4

And if you are in India, you can use this link to order: https://lnkd.in/gDA5Aiw

Beloved Brands: Who are we?

At Beloved Brands, our purpose is to help brands find a new pathway to growth. We believe that the more love your brand can generate with your most cherished consumers, the more power, growth, and profitability you will realize in the future.

We think the best solutions are likely inside you already, but struggle to come out. Our unique playbook tools are the backbone of our workshops. We bring our challenging voice to help you make decisions and refine every potential idea.

We start by defining a brand positioning statement, outlining the desired target, consumer benefits and support points the brand will stand behind. And then, we build a brand idea that is simple and unique enough to stand out in the clutter of the market, motivating enough to get consumers to engage, buy and build a loyal following with your brand.

We will help you write a strategic brand plan for the future, to get everyone in your organization to follow. It starts with an inspiring vision that pushes your team to imagine a brighter future. We use our strategic thinking tools to help you make strategic choices on where to allocate your brand’s limited resources.

Our brand playbook methodology will challenge you to unlock future growth for your brand

  1. Our deep-dive assessment process will give you the knowledge of the issues facing your brand, so you can build a smart plan to unleash future growth.
  2. Find a winning brand positioning statement that motivates consumers to buy, and gives you a competitive advantage to drive future growth.
  3. Create a brand idea to capture the minds and hearts of consumers, while inspiring and focusing your team to deliver greatness on the brand’s behalf.
  4. Build a brand plan to help you make smart focused decisions, so you can organize, steer, and inspire your team towards higher growth.
  5. Advise on advertising, to find creative that drives branded breakthrough and use a motivating messaging to set up long-term brand growth.
  6. Our brand training program will make your brand leaders smarter, so you have added confidence in their performance to drive brand growth.

To learn more about our coaching, click on this link: Beloved Brands Strategic Coaching

To learn more about our training programs, click on this link: Beloved Brands Training

If you need our help, email me at graham@beloved-brands.com or call me at 416 885 3911

You have my personal promise to help you solve your brand building challenges. I will give you new thinking, so you can unlock future growth for your brand.

Signature

Graham Robertson

Founder and CMO, Beloved Brands Inc.

Tis the Season for….Returns.

“I do not consider a sale complete until goods are worn out and customer is still satisfied.”  L.L. Bean, 1916

Research shows that nearly $50 billion in merchandise is returned to retail stores during the holiday season.  This year,  I had three items up for returns:  running shoes (wrong size), two t-shirts (wrong size) and a DVD (which didn’t work)   I had all the receipts, original bags and my story well-rehearsed to avoid any confrontation.   I figured this should be pretty easy; all three are exchanges not returns.

Store #1:  I brought in my shoes and handed the clerk the receipt.   I said “I’m looking for the same shoe in a different size”.   She grabbed the receipt and said “the best that I can do for is you give you a gift receipt”.  I said “all I want is the same shoe in a different size”.  And she snapped back, “Sorry sir, I can’t do that, since we need to be able to track all the returns”.   Two minutes later, I was walking out of the store, completely stunned and frustrated, with a plastic little gift card that I figured my wife or daughter could use on her next purchase.  They just lost $100 sale, and created a frustrated customer not to return again.

Store #2:  I brought in the DVD that failed to work.   It was only $15, but in my mind “Brian’s Song” is a rare movie I wanted to share with my son.  The clerk said “we can exchange it if you’d like”.   He looked up in his computer and said “oh we are out of it, we could order one for you, it should be here within two weeks”.   Since the store is 45 min from my house, I said “no thanks, I’ll just take the cash then”.   The store manager then murmured something to the clerk, never looking at or addressing me directly.  The clerk then said “I’m sorry sir; we can’t do a return if it’s been opened”.   I said “how can I know it didn’t work if I didn’t open it?”    After a few more back and forth, they did eventually give me my money back.  Another lost sale and frustrated customer determined to find it on I-tunes.

Store #3:  This should be easy,  I wanted the same t-shirts in a different size.   With no return desk, I went to shelf, grabbed two t-shirts and got in line at the cash.  I said “I’d just like to exchange sizes”.  She scans each of the 4 shirts in and says “that will be $2.26”, handing me a coupon for my next visit.   I said “I just want to change sizes, shouldn’t that be free?”  After a two minute conversation, the manager came over to do the classic over-ride followed by a long explanation to me of what just happened.   All I wanted was my t-shirts.  And while I was now a frustrated customer, I thought it was hilarious that the store clerk took the coupon away, since it wasn’t a sale after all.

Each store completely forgot about the consumer.   All the work the brand had done to create loyalty over the years is gone in a blink of an eye.   If your brand is loved, it can turn to Indifferent in a heart beat.  Imagine losing a life long customer over $2.26.   Most marketers think that creating a great brand is about creating awareness and demand.   But they forget the post purchase experience which includes a great returns policy.   Brands that get it include Costco, which has such an amazing returns policy it makes the membership fee worth it.  They never ask questions, sending it right back to the manufacturer.    L.L. Bean still has that same amazing returns policy fast forward to the modern day:  Customers can send any item back, at any time, with or without receipts, in any condition…and still get a refund or exchange.  Brands that get it, stand behind the sale.  

With these three brands, two out of three expected exchanges turned into full refunds.  I walked away frustrated and stunned at how bad the policies were.

And for some humour, the best clip I could find on “returns” is from the Office.   I’m sending it back!!!