In a recent study published by The Society for Competitiveness, 119 consumer facing corporate brands and their revenue growth rates were studied. This study was unique in that product branding contribution to revenue growth is extensively examined but corporate brand contribution to revenue is far less analyzed.
The data examined was for the period from 2011 to 2016 and includes Tenet Partner’s CoreBrand Index® which provides BrandPower (a survey measure of Familiarity and Favorability with a corporate brand), fundamental financial data, and paid media from Kantar Media Intelligence.
This research drew on from our chairman James Gregory, Ph.D. and Jack Weichmann’s definition of the corporate brand – “that is the public’s perception of a company – the preconceived ideas and prejudices that have formed in the minds of customers” (1991, pg.2).
The CoreBrand Index (CBI) was developed to address the lack of quantitative data available on corporate brands. For over two decades it has been the basis of models that measure how the brand contributes to market cap and brand valuation.
The CBI is a telephone interview conducted among an audience of impartial observers. Respondents are business leaders who are also affluent consumers. They are Vice President (VP), Director and Manager level executives in the top 20% of U.S. businesses, based on revenue. Respondents rate their Familiarity with a list of 40 companies. Those that indicate that they know more than just the name of the company are then asked to rate Favorability on three attributes: Overall Reputation, Perception of Management, and Investment Potential. These measures are then combined to create BrandPower, a single measure that conveys the corporate brand’s size and quality among respondents. The measures are reported on a 100-point scale. Each company is rated by 400 respondents per year. Approximately 1,000 companies are tracked, many dating as far back as 1990.
Figure 1 below highlights the analytical process employed by the authors to examine how corporate brand can contribute to revenue growth.
The first step was a correlation matrix that examined BrandPower growth in different time periods compared to revenue growth. 1-, 3-, and 5-year changes were examined. The results were not as encouraging as we expected. Ultimately, it was concluded that the level of BrandPower may be impacting the relationship. Larger brands were maintaining, not growing. Smaller brands were seeking critical mass. However, mid-level brands had both mass and room to grow. This was then proven in our quintile analysis, where we saw the brands in the middle tier had the highest rates of growth for both BrandPower and revenue.
The tiers refer to the company’s level of BrandPower. Tier 1 is the strongest, followed by Tier 2 and so on. Examples of companies in Tiers 1, 2 and 3 are:
Tier 1 – Coca-Cola & McDonald’s
Tier 2 – Tyson Foods & Old Navy
Tier 3 – Pet Smart & Papa John’s
Figure 2 below shows an overall regression analysis of BrandPower growth rate and sales revenue growth rate for all 119 companies.
Figure 3 below identifies the same analysis, but with only the middle tier, tier 3, companies. As can be seen by the regression conducted, the growth coefficient is nearly twice for tier three than it is for the entire group, 0.1728 vs. 0.0897. This indicates a higher rate of revenue return for BrandPower growth among the tier 3 companies than for the broader group of competitors. This result informs us that companies in the middle tier have tremendous incentive to improve their BrandPower.
Further analysis of paid media spend and BrandPower demonstrated that as paid media increased BrandPower increased. An analysis of brand valuation showed that for an incremental paid media investment of $1 million, a $2 million increase in brand valuation could be expected. This 2:1 return on investment is a significant argument in favor of investing in the corporate brand.
References
Koch, C., Puckey, B., Williams, V. (2019). Empirical Findings: The Corporate Brand, Competition Forum, American Society for Competitiveness, Vol. 17, Number 1, 2019, (1-12).
Gregory, J.R., & Wiechmann, J.G. (2001). Marketing Corporate Image: The Company as Your Number One Product. Lincolnwood, Illinois: NTC Publishing Group.
In times of crisis, we are reminded of the fine line between offering support and capitalizing on tragedy. With the current global pandemic bringing unprecedented strife and disruption, it is more important than ever that brands maintain lines of communication—but do so in an appropriately human way. The current crisis hopefully has a relatively limited window, but the impact of how brands communicate with their audiences during the crisis can have long-term effects, both positive and negative.
It’s about considering the frame of mind of the person receiving the information and asking yourself not, “do I want to convey this information?” But rather, “do they need to hear this information? Am I being relevant to them in this moment?” For brands, that means recognizing our shared reality, and containing your message to assurances that you are still operating, while taking all safety precautions, and therefore are still there for clients in these trying times. It may also mean reaching beyond your typical talking points, adapting your message, product or service to help solve the current need, i.e. relevance. Your tone should be compassionate and authentic, and your message focused. Note the difference in these two emails:
(to existing customers) As we all work to navigate the ongoing effects of COVID-19, I’d like to let you know how we here at [company] are responding to the challenge and what it means for you.
We’re very well positioned to adapt to the current crisis, thanks to a long-held philosophy of workplace flexibility and employee ownership. The team members you work with every day are equipped with technology and collaboration tools that allow them to stay engaged wherever they are.
versus:
(to new contact) I hope that you and your loved ones are healthy and managing through the quarantine. Things are quite interesting on my end, trying to work from home and home school two middle schoolers. The wine is very well stocked. 😊
While the world is a bit strange right now, [Company]’s top priority remains our clients. Therefore, I’m passing along this Coronavirus Insights Kit our research team has put together over the past couple of weeks.
The first is reassuring, the second off-putting. The first authentic, the second forced.
Communications are a key part of how we build brand presence in the mind of our clients. Brands have personalities, just like people, and messaging and tone should be grounded in and reflective of those personalities. The communications we put out now will contribute to lasting impressions beyond the current climate: a message that reads as tone-deaf or opportunistic now can undercut a carefully established strategy built around more positive brand personality attributes.
Now is a time to be generous and considerate with each other. It is a time to demonstrate the best your brand can stand for.
The world has dealt with a lot in the first months of 2020. Events are changing how we live, think, do business, and how we’ll move forward. Fundamentally what we have are two very different energies tearing at our norms – powers of nature thrust upon us and long-standing societal choices coming home to roost. Both are forcing brands to evolve. But how should that happen?
As an agency that believes in the power of Brand to create positive change, we’re intensely curious about how businesses and organizations are responding. In March and April as coronavirus brought confusion and fear, we looked on, a little underwhelmed as brands adopted safe playbooks offering eerily similar messages with somber music, empty highways and refrains of “we’re all in this together.” But with time, many began to translate good wishes and hopes into action by helping local communities, finding ways to protect workers’ health and income, and start serving their customers again.
Today, coronavirus remains an ever-present danger, and brands are discovering the potential positive impact of a coordinated Black Lives Matter movement. Ultimately what we hope to see brands do, and what we advise clients to aim for, is commit to more than superficial change. Right now, we want to see brands take a leadership role by promoting discourse on systemic racism proactively, not only when their actions, communications or logo is called into question, or because other brands have done so.
Why though? Why do brands have a role to play in advancing social justice? We believe that as brands have evolved, creating deeper connections with consumers, having a personable voice in social media, asking us to consider them more human, they have responsibility to be more human and help move the rest of us humans forward.
As always, the best examples of brands in action are those making decisions through their brand lens. They ask, “applying our core values to the present moment, what are we capable of beyond our product or service?” “How do we align with our customers’, executives’ and employees’ stance on the issues?” “In our lane, what slack can we pick up? What can we do, functionally and emotionally, better than anyone else?”
As your brand weighs short- and long-term strategies, here are five critical actions that can guide you through the rest of this year and beyond:
1. Aim for substance The easiest, quickest changes to make are at the surface. But we don’t advise stopping there because superficial tweaks in your brand communications or token actions don’t have the power to bring people along to your point of view. That’s hard work, true, but it can reap the greatest rewards in terms of making progress. NBCUniversal committed to a workforce made up of 50 percent people of color, 50 percent women. That’s impressive. Substantive action doesn’t have to be changes to workforce, logo or name (more below) but can go to the root of the problem. Netflix pledged to shift up to $100 million to banks and initiatives that serve Black communities. The potential impact is massive, helping make loans available to people who, historically, haven’t had access to investment capital. That’s a substantive change.
2. Be true to you When looking for rules to play by, start with your brand. That’s why it was created, to establish traits and values that can guide your brands through whatever comes your way. If you don’t have a thoroughly thought out brand strategy that accounts for unforeseen scenarios, now is the perfect time to set down how you believe you should act during crisis or societal unrest. No brand could have planned for current events prescriptively, but strategically you can create a proactive brand that grows and provides a strong foundation from which to lead when the unexpected arrives. Because it will. We recommend your planning going far beyond reactive crisis communication, adopting aspirational thinking, and taking a hard look at the changes you need to make to live your values. Ben & Jerry’s progressive brand values emphasize deep respect for people inside and outside the company. While their reaction to George Floyd’s murder was extraordinary and unexpected in its detailed call for police and legislative reform, it was 100% authentic to what the brand stands for.
3. Re-align brand values with customers’ and employees’ Even brands led by charismatic frontrunners cease to exist without customers who share their passion and employees who bring the brand to life. That’s why it’s important to have a pulse on your customers’ POV and act on it. This isn’t a question of aligning with customers whether “they want change” vs. “they are cool with the status quo.” If your customers come down on the side of an issue that goes against your best moral judgment, it’s your opportunity as a public-facing entity to change hearts and minds. NASCAR recently angered some fans by banning displays of the confederate flag. While it may have been a calculated effort to gain brand awareness and expand its audience, we applaud it equally as an effort to bring a different perspective forward.
The most effective organizations are those in which the leaders and employees share the same beliefs, this is how trust is created and it applies to day-to-day business, as well as social issues. This moment is an amazing opportunity share corporate beliefs and get people on the same page.
4. Lead society forward Brands don’t have to be as outspoken as Ben & Jerry’s to inspire progress. For decades, Land O’ Lakes, Aunt Jemima, Uncle Bens and others felt pressure to change racially offensive logos and names. 2020 is their time to act, hopefully bringing awareness to institutionalized prejudice. After Quaker Oats decided to rebrand Aunt Jemima by removing her image from packaging, NPR spoke to the niece of one of the women who served as the inspiration for the illustration, Lillian Richard. In the piece, she shared concerns that her aunt’s contribution to the brand will be erased, forgotten.
But what if Quaker Oats had taken it on themselves to talk to Richard’s family, and those of other brand ambassadors? The niece made a strong point – Richard’s was extremely proud of her role as Aunt Jemima at a time when few women worked, and even fewer black women could have had that level of visibility. Was it the right kind of visibility? Richard’s niece says she backs the logo change, but wishes Quaker Oats had started a conversation that could have celebrated the contribution women of color made to the brand. The situation is still evolving, and after consideration, we’d advise the brand to pick up the conversation where NPR left off.
Also evolving is the future of the Cleveland Indians and Washington Redskins. As the franchises take action (the Redskins have announced an interim name, the Washington Football Team, while the renaming project continues), it’s an opportunity to promote new beginnings, renewed energy and cultural relevance. The teams can claim not just being on the right side of history, but being part of this moment in our history by recognizing and building awareness for the Native American groups that have long been their symbols. How many organizations wish they could generate this much conversation around their brand, or be as relevant to the conversation?
While the changes to Aunt Jemima, the Washington Football Team and others are significant, product rebrands and even team name changes occur regularly, and consumers and fans still show up. Their success will rest on the ability to find an authentic voice that speaks to core values (new or existing) and re-build trust with consumers.
5. Increase authenticity and transparency Today is also the perfect time for brands to come clean and publicly right wrongs they’ve made in the past. There are many examples to pick from, but the NFL is an easy one. In early June, the San Francisco 49ers told us that Black Lives Matter to them which is a step in the right direction. But there’s more that we’d recommend the brand do, given its past with Colin Kaepernick who they planned to release after he famously put police brutality awareness on the 50-yard line.
At the same time, the league itself apologized for not doing enough to hear players’ concerns on racial inequality. They’re moving the ball up the field, but critics say they’re not quite there yet. What could win them over? Trust may be forward looking, but it’s based on the past. The NFL will have to loudly proclaim its renewed values and live them every day. As the adage goes, actions speak louder than words.
Our advice on authenticity applies across the board for organizations’ well-intentioned reactions as well – they have to truly believe in something and commit for the long-haul. For instance, it’s encouraging to see company’s make Juneteenth a paid holiday this year, but if it’s not based on larger plan for promoting equality, awareness and education, the meaning risks getting lost.
People want to know what your brand stands for now Today, brands have made great progress becoming more human, allowing consumers a connection beyond products and services. What this means though is that people are more aware of how an organization’s actions jibe with stated values, and are not afraid to call out or cancel brands. This should not strike fear into brand managers, but demonstrate the opportunity to deepen affinity.
There was much to keep our attention during this election season. As a result, I found my professional role as a brand strategist inserting itself into my personal role as a voter. My natural tendency was to glean where I saw brand concepts playing a key role – in our perceptions of the candidates, their platforms and the multitude of consumer businesses that chose to get involved.
Personality drove brand perceptions
A strong brand positioning integrates both positioning attributes and personality attributes. Shorthanded, positioning integrates both what you say as well as how you say it or the tone of voice. This construct was evident by both candidates’ positioning, whether by intention or by perception. In addition to their differing policy viewpoints, which in large part, define what they say or what they stand for, President Trump and President-elect Biden have distinctly different personalities. While some of that personality is an extension of their party’s platform, much of it is inherent to who they are or who they chose to appear as to the electorate.
This difference in personality became highly relevant as the election became about identity over policy. Their identities (or personalities) defined the brand of each candidate.
Trump’s core supporters see him as aggressive, a bold outsider to the system, and fighting the good fight. His detractors see him as self-serving, dishonest and reckless. Biden’s voters see him as “not Trump.” His active supporters also define him as authentic, experienced, a stalwart (having gracefully persevered through a lifetime of tragedies) and sincere. His detractors see him as an entrenched insider, outdated and weak. The narrative for this election was essentially cast as a good versus evil storyline. Which candidate was good and which was evil was defined by how you perceived their personality, and thus, their brand.
Platforms defined campaign slogans
For each candidate, multiple slogans were used at varying points over the campaign. Trump brought forward his ubiquitous 2016 campaign theme, “Make America Great Again,” as well as others such as “Law and Order” and “Promises Made, Promises Kept.”
Biden launched with a “Battle for the Soul of the Nation,” later introduced “Build Back Better” at the Democratic National Convention and complemented with other ideas, including “Unite for a Better America” and “Our Best Days Still Lie Ahead.”
For me “Make America Great Again” rose to the top as the core reflection of what Trump’s campaign stood for in the eyes of its supporters. Biden’s slogans were less sticky and no one slogan seemed to identify the campaign.
Reflecting back to what defines a brand positioning, these slogans are a distillation of “what you say.” In essence, they serve the same role as a tagline.
A tagline is an external expression of an internal brand positioning. It can serve as a rallying cry for employees or in this instance, for supporters. It offers a compelling shorthand for the positioning, and if done well, is concise, memorable, relevant and differentiating.
Whether or not you agree with the position that underlies these slogans (taglines), most are objectively successful from a brand standpoint. “Make America Great Again” is deeply embedded in the Trump ethos. It emotionally ties the campaign to its supporters. It’s memorable. And it certainly became a rallying cry. That said, I do question the use of the same tagline after four years in office. It seemed like an evolution to “Keep America Great” was attempted, but didn’t stick. This in itself reinforces the strength of the original tagline.
For Biden, “Battle for the Soul of the Nation” was his best effort at creating a powerful emotional connection. “Build Back Better” never attracted quite the same level of emotion, but structurally, its memorability is enhanced by the alliteration. And tactically, it was tied to every Biden proposal from jobs and economic recovery to racial equity and pandemic policy. Its strength was in its consistency at all levels of campaign messaging, exactly how a positioning statement and its shorthand tagline should be implemented.
Corporate voices demanded to be heard
From large consumer companies to financial institutions, many brands attempted to turn votes into marketing. Boosting voter turnout, encouraging voter registration, aligning with specific candidates – many companies attempted to accomplish at least one of these objectives, often times while simultaneously selling product. Like no other election I recall in my lifetime, the number of companies and corporations demanding to have a voice in the election was near immeasurable. According to a recent article in Fortune, “over 2,200 companies stepped up their civic responsibility efforts, embracing their power to drive increased voter participation.”
And yet, such action risks alienating a large percentage of buyers and users. Seemingly, it was a risk many companies were willing to take this election. In our article entitled, “Five ideas to help brands make an impact” we spoke about the importance of speaking out and leading society forward in a way that is authentic and true to their brand platforms. I’d argue that many companies took that advice when considering their election-related outreach.
For Gen Xers (like me) the first corporate election initiative that comes to mind is likely MTV’s long-standing “Rock the vote” partnership. For 30 years, MTV has been partnering and funding this high-level initiative to encourage voter registration. It is impossible to separate MTV from the program, as it’s become an authentic part of what the company stands for.
This year sports leagues, most especially the NBA and its players, complemented MTV’s work with initiatives to encourage voter registration and enable voting in their stadiums. A natural outcome of players’ outspokenness and powerful actions in support of Black Lives Matter and in direct response to the shooting of Jacob Blake in Kenosha, these get-out-the-vote initiatives seemed natural and authentic. And more than any other sport, the NBA players’ voices combined and elevated to the league level.
Other companies got involved by giving employees time off to vote. JPMorgan Chase, Coca Cola and Twitter, among others, ensured that at least one of the boundaries that prevents people from voting was removed. It’s an action that demonstrated leadership, I believe, in hopes that others – and perhaps the federal government – will follow.
And in yet another effort that one might cynically describe as less generous and more aimed at selling product, many fashion companies united behind the “I am a voter” campaign by offering for purchase a mix of approachable and high-end products featuring the slogan. The outreach is defined as a “public awareness campaign that aims to create a cultural shift around voting and civic engagement by unifying around a central truth: that our democracy works best when we all participate.” Bringing together fashion and social media with designs from the likes of Stuart Weitzman, Jennifer Meyer, Tory Burch and Grayson, ensured the importance of voting was emblazoned on celebrities, influencers and everyday folk across the country. If nothing else, awareness was raised.
Perhaps this election was unlike any other. And it looks like it may continue to be. As you tire from the rhetoric, distract yourself like I do, by finding where brand is playing a role.
“Data science” is a term unfamiliar to most marketers. I believe it should—and will—be given more attention because in my view it can be a true game-changer. This highly evolved form of analytics can, if employed properly, open the door to new actions that optimize the return on brand investment.
To improve ROI look forward, not back
When CMOs think of ways to optimize ROI they generally turn to tried-and-true metrics. What was the response rate on a campaign? What net promoter scores are we achieving? How many clicks is the website getting? Measurements such as these are valid, but they all have one thing in common: they’re retrospective.
Marketers look at dashboards and reports, and use that historical data to decide what to do next. That’s the way it’s always been done, but it’s as much art as science. It’s future planning based on hindsight.
What intrigues me about applied data science is its potential to proactively solve targeted business problems. Adding machine learning, AI, unstructured data and models that leverage these new elements to structured operational data opens up completely new areas of exploration, making it possible to predict the future more confidently and forecast more accurately. It’s a shift from understanding what happened to understanding why it happened: going beyond correlation to reveal causation.
This predictive foresight is a fundamental driver of improved ROI on brand investments. Using evidence-based prescriptive intelligence to drive action brings the solution closer to the challenge. That boosts effectiveness from the outset, meaning less money spent for more benefit.
Let’s take a look at a specific example: customer churn. What specific actions does a business have to take to boost retention? An analysis of customer attributes and the actions they’ve taken reveals something about the those who leave compared to those who stay, but that macro-level insight is very broad. Digging in to both the structured and unstructured data, however, can help marketers connect the dots and change outcomes. Spotting an unhappy customer early makes it possible to take preventive steps before that customer leaves…and may even prompt that customer to become a brand advocate, simply because the company came through in a pinch.
Getting ahead of problems can have effects that extend across the business. It’s about more than driving sales or improving retention. It might be a manufacturer tracking problem reports to predict warranty claims, or a bank being able to spot anomalies and abnormal behavior to combat fraud. All of this ultimately comes back to the brand because how a business responds to challenges has a real impact on reputation: the brand benefits from the halo effect of a better-run business.
To better meet your customers’ needs, listen to them
There’s a treasure trove of useful information in the voice of the customer, contained in everything from market research and survey responses to emails, chats, reviews and customer service transcripts.
What data science allows CMOs to do is marry those open-ended comments with operational data to generate insights not typically available from structured data. The voice of the customer adds vitally important context.
There’s a lot of promise in the natural language processing space. By using machine learning and AI, it’s possible to uncover trends and patterns in speech and how people are talking about you. What’s the buzz on social media about your brand? What’s the reaction to your latest product announcement? Are people singing your praises or taking shots at you? Taking these learnings from the realm of random anecdote to rigorous analytic insight and linking actions to outcomes can be an incredibly powerful strategic planning tool.
You can start from anywhere
The sophisticated capabilities described here may seem inaccessible, but that’s far from the case. Data science is inherently scalable because it’s a methodology, not a rigidly defined solution. Whatever data is available can serve as the core of an emerging data science capability. For example, customer reviews are available across ecommerce platforms but the scale and complexity would be hard to resolve insights. Using AI and Machine learning is both time and cost efficient, and in this case, get marketers closer to the voice of the consumer. Traditional research methods just can’t achieve this level of efficiency.
Data science extracts relationships between variables in a way that simply is not possible using reporting and planning tools such as spreadsheets. It’s about taking available data and mining it in a new way to get at what’s driving the outcomes that traditional methods are already reporting. Making more data available and adjusting the models accordingly extends the potential.
Unanswered business challenges are the true starting point. Experience has shown us that businesses are sitting on a wealth of information, but that the value of that data often goes unrecognized. They have questions that seem impossible to answer, while in reality everything needed to find the answers already exists—it just needs to be looked at in the right way.
There’s more to explore
Tenet Partners has a Data Science practice for marketers, rooted in advanced analytics and driven by analytic expertise. To find out more, visit our Data Science offering page.
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