Happy Valentines: A love story for Brand Leaders

Posted on Posted in Beloved Brands Explained

Why Does Love Matter for a Brand?

Today is all about love. While you might be buying some flowers or chocolate for the one you love, what are you doing to show your consumer that you love them? How do you expect them to love you, if you don’t show them a little bit of love.  

Here’s a cute ad that Coke, one of the most beloved brands, is doing to celebrate the day with their consumers.  

More Love Means More Profits

Brand Leaders are thinkers and don’t always feel comfortable getting all emotional.  They don’t have time for fluff, because they have a bottom line to hit.  How many times have we heard: “keep it simple, show my product shot, say my superiority claim, show a demo and the product will sell itself”.  

But what if I told you that the more love you can generate for your brand, the more money you will make. Does that sound like crazy talk?

The Brand Love Curve

In the consumer’s mind, brands sit along a hypothetical Brand Love Curve, going from Indifferent to Like It to Love It and finally becoming a Beloved Brand for Life. 

Love Curve Detailed

The farther along the curve the deeper the connection. At the beloved stage, demand becomes desire, needs become cravings, and thinking is replaced with feelings. Consumers become outspoken fans.  That connection helps drive a positional power for your brand—a power versus competitors, customers, suppliers and even versus the very consumers that love you. With that power, consumers will pay more, use more and follow where the brand goes next. All this love goes straight to the bottom line. 

Brand Love: 

Marketers keep debating what makes a great brand. Is it the product, the advertising or even the experience?  There are 5 sources of Brand Love: the brand promise, experience, strategy, innovation and the communication of the brand story.   

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The brand’s promise must be relevant, simple and compelling enough to connect. A brand can only be better, different or cheaper. Otherwise it won’t be around for very long. The most beloved brands are based on an idea worth loving. The strategic choices should start with where the brand is on the Brand Love Curve and finding ways to create a deeper connection.  Externally, the promise is delivered through communication, but just important the brand acts as an internal beacon to the culture and the R&D. The brand story expresses the promise in a compelling way, whether through paid media, earned, social and search. The experience created by the culture has to over-deliver the brand promise. Freshness of innovation, keeps the brands one-step ahead of competitors. Every new product should tie back to the brand promise. Execution in every facet matters: you have to love what you do. If you don’t love the work how do you expect your consumer to love your brand?

 

Brand Power: 

Once you create love with your consumer, the key is turning that love into power. 

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That starts with a power over the very consumers that love them. The most loyal users line up in the rain for new products, promote and defend the brand, pay the price premium and even follow the brand to new categories. With this connection, beloved brands have a power over channels, as people would rather switch stores than switch brands. There’s a power over the media. Not only can you afford more paid media, you can generate more free media: earned, social or search media. Apple generates over a billion dollars of free media via the mainstream media and social media. Beloved Brands have a power over employees that want to be part of the brand who intimately know and bring a passion to the brand before they even start.

Brand Profit:

Because the brand is now tied more to how you feel than just the product, there’s a direct impact on the P&L. 

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The most beloved brands create momentum as crowds follow crowds, turning it into share gains.  Consumers follow the Brand into new categories. The price is inelastic with loyal brand fans pay a 20-30% price premium and even the weakened channels and take lower margins. In terms of costs, suppliers will cut their price to be on the brand’s roster, and higher volumes lower cost of goods. With higher share, new categories, an inelastic price and lower cost structure, the most beloved brand can turn the connection into growth profits. 

The formula for a Beloved Brand is simple:

Beloved = Power = Growth = Profit

 

So maybe it’s time for Brand Leaders to start asking: “And how will this make our consumers love my brand”

Here’s a summary on Creating a Beloved Brand: 

 

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.

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How to drive profits through your brand

Posted on Posted in How to Guide for Marketers

The more loved the brand, the more powerful the brand and in turn the higher growth and profit it can generate.

A beloved brand can use the connection with their consumers as a source of power. The tighter the connection to consumers, the more loved the brand. As a brand becomes more loved, it becomes more powerful, and is able to wield that power onto all aspects of the market. A Beloved Brand can entice consumers to keep coming back, it can fight off competitors to win with key targets, it can generate earned media easier, it can challenge suppliers to come back with lower costs and it leverage its positional power to gain preferential treatment with real estate owners, government or tour operators. Even employees would rather work for a powerful beloved brand than an indifferent brand.

Brands move along a “LOVE CURVE” going from Indifferent to Like It to Love It, and then they’ll make it their Brand For Life. The farther along the curve, the more connected to the brand.

The “Brand Love Curve” can be linked to the Brand Funnel which becomes the underlying scoreboard. You can use the funnel to map out the buying process for the consumer, identifying both strategy and tactics to move them along the funnel towards being more loved. Used properly, the Power of the Brand can help drive the P&L with four important levers: driving increased price, lowering costs, increasing share, creating new markets. As a result, a powerful connected brand is much more efficient. And that efficiency can leverage the P&L to invest back in the brand’s connectivity and drive Profit and over the long run create value for the Brand.

As a Brand Leader looks to how to drive their Brand through the P&L, here are the four ways the Brand Leader can drive profits:

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1. Using price as a weapon to drive Brand Value. It can be a price change, up or down, or it could be trying to get consumers to trade up or down.

  • 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.

  • Trading Up: If you have In 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? Does your brand image/ratings allow it?
  • Trading Down: Risky, but you see unserved 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.

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. 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. Can’t be all things to everyone. The final concern is what does it do your Brand’s image, especially risky when trading downward.

2. Managing cost as a weapon to enhance the Brand’s Value. It can be either your cost of goods or the potential selling costs.

  • 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.

  • Selling 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.
  • Selling 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.

3. Externally, the Share and volume game are traditional tools for brand. Either stealing other users or get 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.

  • 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 “life saving” 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.

4. Increase the Size of the Market by Finding New Users or Creating New Uses.

  • Find New Users: 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.
  • 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.

  1. Higher volume helps you exert pressure on costs. That could be supply costs, operations costs, 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.

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.

Most marketers will tell you that branding is about positioning. I think positioning is a means to driving growth and making money.

 

To view a copy of How to drive Profits into your Brand, click below:

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

 

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