We often think of brand value in financial terms. But that value, I would venture to suggest, is actually a result of a broader initiative that brands need to think about in these busy times: finding ways to be valuable in the lives of those who buy from them.
It’s increasingly easy to be a brand that people talk about in glowing terms, part of a sector that appears to be booming, and yet on a downward slide financially. It’s a sign perhaps of just how much we now focus on (the wrong) numbers at the expense of understanding true value.
Brand equity is the accumulated added value element of your brand. I often refer to as “emotional margin”. It’s frequently measured as the gap between the price your brand can command through its very presence because of the goodwill it has built up compared with how consumers value non-branded products in your category.
Consciously or not, many brands are now running a freemium model. They are giving away a lot more than they used to, particularly across social media, just to keep up with the changing competitive landscape. And they are hoping to recoup on that significant content investment when consumers do buy. So has any of this changed the fundamentals of brand economics, or has it merely altered the manner in which brands achieve visibility?
We talk a lot about the pressures on brands to perform and about the difficulties of staying competitive in huge and rapidly changing markets. Nevertheless, global brands experienced a 12 percent increase in value in 2014 – and there are powerful lessons for all those responsible for brands in how they did that. If demand generation is part of your role, here are eight things that you can be doing in 2015 to retain reputation, stem decline and make the most of upswings in economies and consumer preferences.
There’s an increasing temptation to see technology as the harbinger of hope and hazard. Every day, the trendy press and commentators on social media carry reports of the next “it” technology together with their recommendations on what every business needs to be doing to ride the wave. Many of these wunder-techs seem to live a few days longer than their press release in the collective conscious. Some though will indeed change the world we live in and how we interact. This report by McKinsey for example identifies 12 such technologies that the company says could have a potential economic impact of between $14 trillion and $33 trillion a year by 2025.
Just been re-reading parts of Matt Haig’s Brand Failures. While the edition I’m looking at is now close to ten years old, its ideas are a timely reminder that though the purpose of brands is to generate goodwill and margin, failure to deliver on expectations and the subsequent “badwill” that engenders is never far away.