Often when executives look to address underperformance on the inside of a brand or business, the temptation is to treat the brand or business as one entity, and to assume that the problems are spread evenly. That’s usually not the case.
Often there are teams within the business that are doing well and others that are struggling to maintain performance or morale. The key tension points? Frontline teams – because the onus is on them to deliver, they have high staff turnover because of the pressure they are under and they feel unsupported and unappreciated. And middle management – because they are also time and task pressured, they need to sustain the performance and energy of the teams they are responsible for, and they must report to executives on the progress being made towards goals and objectives.
Managers mistake the fundamental nature of what they are working with. Treating all the moving parts within an organization as one group and assuming that they are therefore going to change as one when new ideas are introduced is misguided. Steve Denning describes an organization’s culture in this piece in Forbes as “an interlocking set of goals, roles, processes, values, communications practices, attitudes and assumptions. The elements fit together as a mutually reinforcing system and combine to prevent any attempt to change it. That’s why single-fix changes…may appear to make progress for a while, but eventually the interlocking elements of the organizational culture take over and the change is inexorably drawn back into the existing organizational culture.”
Ultimately one-size-fits-all approaches to change risk failing because the momentum of the existing culture, created and sustained by the people who are there, can overcome the new ideas that are being introduced. Reversion then becomes almost inevitable. To fundamentally change the momentum of a brand, executives need to focus far less on what is changing and concentrate more broadly and patiently on a nuanced explanation of why change is necessary.
Numbers matter, but different numbers matter differently. To me, one of the great confusions in marketing is extent and value:
- Extent – how far your brand reaches.
- Value – how much your brand is worth (both literally in the minds of the market and in terms of margin in the minds of consumers).
The temptation is to assume that the brands with the greatest reach must (ultimately) be worth the greatest amount of money and therefore have the greatest value. But to my mind that’s an assumption too far, because of course extent does not monetize or convert to sales consistently, and the value that can therefore be placed on that extent varies greatly.
Does a brand with more likes make more profit than a competitor that doesn’t have as many? Sometimes. Perhaps. I guess. And what’s the critical gap? At what point does extent start to bite? Don’t know.
I’ve seen lots of assertions about the value of reach, but few about the cumulative bottom line effects for most brands with a social media presence.
I’m not saying for one moment there isn’t a relationship, or that a business case cannot be made. I am saying that the two terms are often confused and I haven’t seen the case made well, except for brands that do use their reach directly to monetize their model like Google obviously.
If you’re a retail brand, the fact that your brand has X,000 followers or X,000 likes or even X,0000,000 visitors indicates reach, and therefore influence and possibly authority – but there is no way a lot of brands can quantify that on a balance sheet. There is no automatic translation. Therefore it does not have tangible economic value. It has potential. It shows inclination, even preference. And those are important emotional metrics for brands because they can show whether you are maintaining interest and relevance, but I have yet to see an evidence-based correlation between those numbers and what customers are therefore prepared to pay in terms of increased margin.
A few years ago I wrote about the wild and concerning variances across different brand valuations. In my usual understated style, I suggested that despite the power and prestige of big valuation firms Interbrand, Millward Brown and Brand Finance, there was a possibility that much of what they do was unproven crap. My point was based on the fact that their published estimates of brand equity were wildly different from each other. For example, there was more than $100,000,000,000 of difference between what Interbrand said Apple was worth and Millward Brown’s estimate.
To be fair, I pointed out that there was no way of knowing if one of these firms was actually more accurate than the other two because we lacked any Archimedean point of comparison. Perhaps we would have to wait for examples of brand acquisition to come along, I concluded, before we could find out which, if any, was on the money.
Trademark specialists Markables has called my bluff and those of the big valuation firms. It has found 68 examples of big brands that have been valued using a purchase price allocation approach or, in layman’s terms, instances where a real financial transaction of a brand was conducted. Markables was able to compare a valuation firm’s estimates of brand equity versus the actual price paid for the brands in the year the transaction took place. The difference between the two figures gives a fascinating insight into the general accuracy of brand valuation and a clue as to who does it better.
So how did the valuations stack up? Terribly is the short answer. The overall difference between the actual prices paid and the estimated values of the brands was a whopping 254%, meaning that if a brand was sold for $200m, it was likely, on average, to have been valued at about $500m. That’s pretty crap, even if you allow for some understandable variance.
If you asked me how tall our Branding Strategy Insider editor Derrick Daye is and I told you he was about 15 feet, you’d be quite disappointed to discover that he is 6ft 02 inches.
According to a new study conducted by Edelman Wellness 360 in partnership with Edelman Berland, attitudes to health and well-being are changing with some ironic twists. Modern wellness goes beyond doctor’s visits, clinics, and gym memberships. A growing sense of mindfulness is bringing the mind and mind-body aspects of health into the norm, versus looking at health in terms of muscle and organ “mechanics”. What it means is: Well-being is no longer a health measure; it’s a life measure. And that holds great potential for marketers.
At work here is a trend called The “Now” Movement – which brings together the ‘in the moment’ aspects of the mindfulness movement with remixing traditions. Edelman’s study reveals there is ample opportunity to connect with consumers who attach great personal meaning to their health and potential. But there are curiosities in the data that hints there is much more that lurks behind the behavior.
- From the PEW study, 89% feel they are responsible for their own health and well-being.
- Despite an overwhelming majority mentioning the benefits of having a social support system, 43% didn’t ask anyone for help.
Clearly well-being is still perceived as mostly a private or personal experience which is ironic given the amount of everything else in modern life which is not private. Why would 43% not ask for help? Whatever the reason, it boils down to the fact that the individual did not have enough belief to drive action. When we look at this study in the full context of The “Now” Movement trend, it offers a possible explanation for the lack of belief.
Consider SoulCycle (Founder Julie Rice Pictured Above): This brand weds traditional fitness with elements of eastern spirituality (think Deepak). The addition of a spirituality layer is finding great appeal in our modern and increasingly agnostic society. 37% of the population acknowledges a higher power of some sort, and because they are not pursuing normal avenues to find that meaning, they are looking in many other directions. Micro-congregations happen every day at SoulCycle, Equinox, etc. While they are not religious, the communal value of celebrating each other’s desire to be healthier and happier is absolutely a spiritual win.
The debacle over the Rob Lowe DirecTV ads and the accuracy of their claims is a reminder of just how much pressure marketers are under to get cut-through. Thing is – where’s the cut off point? How do you decide whether the claims you’re making are justified and how do you know you have pushed the boat out too far? Putting aside the legal considerations (not my space), here are four simple rules to filter what you should and shouldn’t say:
1. Prove-able – Can you substantiate the claim? This should be obvious, but it’s remarkable how many brands claim to be the market leader or the most advanced or the key influencer when in fact they are nothing of the sort. Their claims are hope or fantasy – and the proof that they are exaggerating comes in the plethora of small print that accompanies the statements or in the use of qualifying language. It’s disingenuous, for example, to say that over 90% of people think something when your sample size is tiny or to imply that drinking or doing something is going to achieve significant changes to weight or health when the get-out-of-jail disclaimer “Results may vary” is being used in such a way as to really mean ‘You haven’t got a hope in hell of achieving anything like this”.
2. Interesting – If you’re going to tell consumers something about your brand, tell them something they will be interested in. I’m always surprised at how many brands disappear down a rabbit-hole of self-indulgence or self-justification when it comes to thinking why people will find their stuff fascinating. Rule of thumb – your brand is almost never as exciting to buyers as it is to you. If you’re struggling to make your brand seem interesting, here’s a suggestion. It’s probably not. And the only people who can change that are you. Getting the ad agency to find a way to repaint that particular elephant in the room may prove their artistic and creative skills but can only do damage to the trustworthiness of the brand as a whole.