Think BR: Brands that grow businesses
Brands that ask themselves 'why' they are in business rather than 'what' they are in business for experience higher financial growth and increased equity value, writes Anastasia Kourovskaia, vice president EMEA, Millward Brown Optimor.
Anastasia Kourovskaia, Vice President EMEA, Millward Brown Optimor
All brands exist to make more money for their owners; the businesses that own stronger brands outperform the market.
They grow faster because a well managed brand has a positive impact across all the major value drivers of the company.
Marketing has long been the fuel powering successful brands whatever they offer, but how does a brand become great and powerful enough to have a major impact on a company’s bottom line?
In most cases it is the strength of the brand which provides the competitive advantage against rivals whose products may have the same functional benefits.
The strongest brands add extra value to the customer experience and this creates loyalty and subsequently higher sales and profits.
Yet marketers of the strongest and fastest-growing brands also know how important it is to remain true to a brand’s ideals.
These Ideals are the brand’s reason for being and are woven into its fabric and spelled out in the company’s DNA.
Ideals are at the core of the brand and cannot be invented, but they can be unearthed or rediscovered by stripping it back to its bare bones.
What was in the founder’s mind at that historic moment of discovery when they devised their product or service and knew in their hearts that it would improve the quality of people’s lives?
Take two of the world’s most profitable brands, Apple and Red Bull. Apple is in the business of manufacturing the latest consumer gadgets in a highly competitive market but its focus is on its brand ideal of empowering people to express themselves.
Similarly, Red Bull does not exist just to make a best-selling energy drink. Its brand ideal is to uplift mind and body and energise the world.
Businesses driven by a higher purpose not only outperform their rivals, they often create new sectors and markets boosting revenues and profits in the process.
Millward Brown Optimor worked with Jim Stengel, US business consultant and former global marketing officer at Procter & Gamble, on his new book Grow: How Ideals Power Growth and Profit at the World’s Greatest Companies.
This work was grounded in 10 years of brand equity research involving over 50,000 companies.
The analysis revealed that the top 50 businesses had impressive brand ideals aimed at improving people’s lives.
Having a brand ideal affected the organisation’s culture, attracted employees who embraced the ideal and subsequently improved customer experience and the company’s reputation.
Unsurprisingly, an investment in the so-called Stengel 50 would, over the past 10 years, have outperformed an investment in the S&P 500 by almost 400%.
Rapidly growing brands are typically so successful because their brand ideal has engaged everyone from employees and investors to consumers and the media.
Each stakeholder is clear about why the brand exists and how it makes life better; this creates focus and centres the organisation on meaningful goals.
These companies live and breathe their Ideals.
Red Bull’s workforce is recruited from the people who believe in the brand ideal, regardless of their industry experience.
Many are former student ambassadors. They are not just advocates, they are diehard fans brimming with enthusiasm for the brand.
Many of the free sporting events that Red Bull organises are not marketed to a wider audience; they are for athletes only, designed "to support a community of athletes and to bring credibility to the sports they compete in".
The Red Bull workplace exemplifies living the brand values at work. For example, there are ramps in the London headquarters so workers can skateboard from level to level.
Millward Brown’s neuroscience team has carried out further research which shows just how brand ideals affect consumer attitudes towards brands.
It discovered that high-growth brands in the Stengel 50 touch the five fields of human values identified in Grow. These are:
- Eliciting joy: Activating experiences of happiness, wonder, and limitless possibility.
- Enabling connection: Enhancing the ability of people to connect with each other and the world in meaningful ways.
- Inspiring exploration: Helping people explore new horizons and new experiences.
- Evoking pride: Giving people increased confidence, strength, security, and vitality.
- Impacting society: Affecting society broadly, from challenging the status quo to redefining categories.
Of course, the fact that the company has a brand ideal does not mean it is going to continue being centred on it.
Many strong brands do go off course, but they have the ability to return to their fundamental brand ideals and get back on track.
Coffee chain Starbucks opened in Seattle in 1971 with a brand ideal of enabling people to connect socially by enjoying coffee.
Over time it became so focused on expansion and maximising profits that it veered away from the core brand ideal.
When Howard Schultz returned as CEO in 2008, he said that automated machines and drive-through windows were not what Starbucks should be about.
He refocused the organisation on the brand ideal and returned coffee to the heart of the brand, retraining staff to grind coffee in the shops to reignite consumers’ emotional relationship with Starbucks.
A brand’s ideal is a source of inspiration externally among customers and also a compass for internal decision making.
When it influences every function from marketing and human resources to R&D and finance, the results feed right through to the bottom line.
The Stengel 50
Accenture, management and enterprise consulting services
Airtel, mobile communications
Apple, personal computing technology and mobile devices
Aquarel, bottled water
BlackBerry, mobile communications
Calvin Klein, luxury apparel and accessories
Chipotle, fast food
Coca-Cola, soft drinks
Diesel, youth- targeted fashion apparel and accessories
Discovery Communications, media
Dove, personal care
Emirates, air travel
FedEx, delivery services
Google, Internet information
Hermès, luxury apparel and leather goods
HP, information technology products and services
Hugo Boss, luxury apparel and accessories
IBM, information technology products and services
Innocent, food and beverages
Jack Daniel’s, spirits
Johnnie Walker, spirits
L’Occitane, personal care
Louis Vuitton, luxury apparel and leather goods
MasterCard, electronic payments
Method, household cleaners and personal care
Moët & Chandon, champagne
Natura, personal care
Pampers, baby care
Rakuten Ichiba, e-commerce
Red Bull, energy drinks
Royal Canin, pet food
Sedmoy Kontinent ("Seventh Continent"), retail grocery
Sensodyne, oral care
Seventh Generation, household cleaners and personal care
Starbucks, coffee and fast- food retailer
Stonyfield Farm, organic dairy products
Visa, electronic payments
Wegmans, retail grocery
Zara, affordable apparel
Anastasia Kourovskaia, vice president EMEA, Millward Brown Optimor
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