A strong brand can add value in a way that has been ignored—by making the firm more attractive to executives so they will accept less salary. In an era in which salaries are mushrooming out of control, this is no trivial matter for recruitment and for shareholder interests. A recent paper by Nader Tavassoli (London Business School), Alina Sorescu (Texas A&M), and Rajesh Chandy (London Business School), “Employee-Based Brand Equity,” documents that assertion and explains why.
Executive attraction to a job is based in part on a drive for self-enhancement among a reference group. Associating with a strong brand provides connections that transfer to the executive, such as prestige and success. The implication is that the steward of a strong, successful brand will be a competent and gifted leader. An executive associated with a strong brand will also have visibility, and with visibility comes other positive traits. You remember who is running a leading brand. …Continue reading
Is your brand-building effort effective? Is the budget spend effective? In my first branding book, Managing Brand Equity, I identified indicators that brand-building was misdirected, mismanaged, or underfunded–problems that are increasingly relevant today. With a few edits, here is the list.
- Managers cannot identify with confidence the existing brand image, its strength, and how it differs across segments and over time.
- Knowledge of levels of brand awareness is lacking or imprecise, and the visibility of the brand among segments is just guesswork.
- There is no in-depth understanding of the basis for customer loyalty or of how it is lost or reduced. A systematic, reliable, sensitive, and valid set of measures of customer satisfaction and loyalty by segment is not available.
- The measures of brand performance and brand-building programs are quarterly and yearly, often based on sales. There are no indicators of the brand tied to long-term business success that are used to evaluate marketing programs. Aspirational brand associations, in particular, are not part of the decision criteria in selecting and managing brand-building programs.
- The reward structure and tenure of brand managers do not motivate them to manage strategically.
- There is no long-term strategy for the brand, no vision as to what brand association is desired and what product classes in which the brand should be competing.
- There is no person or team in charge of the brand. Instead, silo organizational units have independent control of the brand with their product-markets.
Any combination of these is a recipe for strategic problems and lost opportunities.
photo credit: Alex E. Proimos via photopin cc
There’s an amazing milestone happening this year, which I’m surprised we don’t hear more about: 2013 will be the year that US marketing spend on digital surpasses TV. TV ad spend will be a little under $70bn (including media placement, creative and agency fees), and digital marketing spend will be over $70bn. Finally, 17 years since I set up a digital team at J. Walter Thompson, the future has arrived!
This is an amazing milestone for us data scientists and marketing analytics folk. Old-style TV advertising doesn’t create much data at all, except some Nielsen-based marketing mix modeling. On the other hand, digital marketing throws out an incredibly rich set of data – whether we’re talking about search, display, location-based services, digital TV/multi-screen with return data, or even email. The explosion of Big Data and the application of analytics is transforming marketing. …Continue reading
It’s the top guy that always gets the marketers’ attention. Let’s target our most valuable customers, the most influential kids, the consumers that buy the most. And yet, at Prophet we’ve found time and time again that chasing the next tier down is actually dramatically more optimal. Almost every time, it’s the second quartile of customers that are optimal to pursue. It seems a near universal law.
For example, we’re seeing many marketers trying to target influencers with social media by targeting “influencers” with the highest edge scores on Facebook. This doesn’t work, because it’s hard to get into their newsfeeds. The optimum goldilocks spot of influencers who you can reach effectively is the second quartile. Imagine a graph: The lines of increasing influence (edge scores) and decreasing ability to appear in newsfeeds is in the second quartile of Facebook users as ranked by their edge scores. Justin De Graaf, senior manager of global marketing strategy at Coca-Cola gave a great presentation at the AMA Big Data Summit earlier this year, making the same point about Coca-Cola’s Facebook targeting. …Continue reading
One year ago today, we launched The Inspiratory as a place to provide commentary on trends and hot topics around the spaces of brand, marketing, innovation, digital, design, and analytics. We built a space for the interested and interesting to visit and be inspired – and you’ve done just that!
Allow us to get nostalgic and look back at the top 10 posts you’ve read over the last year.
In descending order:
10. The Corporate Innovation Incubator
9. The Merits and Demerits of NPS
8. Wanted: Better Brand Advocates
7. What Patagonia and Sanuk Can Teach Rookie Brands
6. Myth Busters: Big Data Edition
5. The Real Reason for JC Penney’s Fall from Grace
4. Back to Basics
3. Can Entering China be Considered Innovative?
2. 10 Steps to Building a Brand Portfolio Strategy
1. Interested and Interesting Podcast, Episode 2: Customer Experience Lessons from a Brooklyn Bike Shop
As members of The Inspiratory community, please tell us: What would you like to read more about? What topics are fascinating you these days, or are there any topics that aren’t being covered enough? Feedback is always appreciated, but now is the perfect time to let us know what you’d like to see more of. Sound off in the comments, below!
photo credit: Leo Reynolds via photopin cc
Proctor & Gamble recently launched a major ROI review to help size and optimize their advertising budgets. Since their total global ad spend is thought to be up to $10bn annually, the opportunity to make a significant optimization improvement is potentially huge.
So how should they set their advertising budgets and figure out the optimal allocation across their portfolio of brands?
There’s only one right way to set an advertising budget, and that is by optimizing against marginal return on investment. So, taking your current plan as the starting point and ask: …Continue reading
Analytics is often seen as a resource focused on supporting marketing. However, in the era of Big Data, analytics has a great deal to offer the sales team as well. I spoke at Georgia State University last week, addressing their Sales Executive Roundtable of two dozen senior sales leaders. Here are 10 thought-starters for sale analytics that really got the debate going:
1. Create a segment of 1
Analytical tools now allow you to target an individual customer with a tailored message through an optimal channel. At Prophet, we worked with Snapfish combining both analytics and a rigorous “test and learn” approach to ensure each customer and prospect was receiving highly targeted and bespoke content. In the B2B space, we see that how customers want to be served is a key dimension of how to segment them—not via SIC codes or conventional firmographics. Their preferred method of interaction (call center, frequent rep visit, etc.) is their defining characteristic.
2. Most CLTV models are used incorrectly
How do we focus our sales resources? A CLTV model might suggest we focus our sales efforts on what look like our highest value customers (e.g. in insurance, to up-sell a home policy to an auto customer). However, CLTV models often mislead sales leaders to focus on fewer current high-value customers as opposed to a far greater number of mid-tier customers who have the potential to become higher value. …Continue reading
Too many companies fall into too common of a trap: mistaking the difference between an insights function and an insights system. Far too often, companies invest in an insights or research department, or function, only to have its value limited because they are not connected to the broader business.
And more than ever, companies are investing in primary research but getting mixed results. Don’t get me wrong. Primary research is core to being a more outside-in, customer-centric business. However, that’s just one tool – it’s what happens with those insights and who is using them that make the difference. Far too often, this primary research is conducted, summarized to a select set of stakeholders, and then put on the shelf.
An insights function is critical to bringing expertise, discipline and execution to the gathering of insights. However, what sets high-growth companies apart from their peers is having an insights system. An insights system is not bound by functional areas or business units. It is not project-based. It is not a one-way flow of information. Far too often, insights are left at the customer level, not the market level. Or even worse, they are never shared at all.
It is by definition a system. An insights system has on and off ramps for insights. A wide range of stakeholders access and contribute to the system, well beyond the insights or research function. This includes sales and marketing, innovation and R&D, service, engineering and operations, and even partners and principals. Each of these groups has key insights into customers’ needs and behaviors, competitors and ideas for growth.
So, how do you start to build out the system? Market leaders such as UPS, 3M and Microsoft have built their systems by following these proven strategic steps: …Continue reading
The news of JC Penney’s recent travails brings the topic of retailer pricing and promotion very much to the top of my mind. Just how can you lose almost a billion dollars in a year by assuming the consumer actually wanted every day low pricing? Many commentators have missed one crucial detail: The biggest losses actually occurred in the quarter when JC Penney had reverted to a pattern of regular and promotional pricing. It was actually unsuccessful SKU-assortment, pricing and promotion decisions that created the biggest losses, not everyday low pricing. …Continue reading
Analytically-driven marketing is not just about the data and the math. Successful firms of the future will be those that create an analytics culture for marketing that allows the human element to shine through. It’s as much a question of creating the right culture as it is the right data and algorithms.
I recently caught up with Dr. R. Sukumar, CEO of Optimal Strategix to discuss the future of analytics. Despite the overuse of terms such as “Big Data” being thrown around with looser and looser context and the onslaught of analytical solutions guaranteeing a solution to every marketing challenge, Dr. Sukumar sees the human element as ever-present: “There will always be a need for human interaction, particularly with new sources of data. And there will always be a need for human interpretation and application.” …Continue reading