Unlocking Brand Value
With a crowded marketplace, Gen Z gaining purchasing power, and the rise of direct-to-consumer sales online, many brands are asking the question - Is brand loyalty lost today? The need to understand brand value, beliefs, and emotions is where marketers can focus to unlock future loyalty. But what makes someone loyal? The time of one-size fits all is gone and marketers today are fighting for investment and strategic value to position their brand effectively across multiple markets, channels, and audiences. As mergers and acquisitions happen more frequently, entrepreneurs start their businesses, and old brands look to transform for the future, understanding brand value is an important part of your strategy. How will you stand out from the crowd while strengthening your brand?
What Can We Learn From Gen Z
Everyone is talking about Gen Z, those born between 1997-2012, and their increased spending of 3% compared to last year. This growing purchasing power has retailers looking to understand what drives not only what they buy, but how they get them to buy again. Let’s look at ULTA for example. A struggling retailer that no one knew about in 2013 to a household name and destination for beauty products for all ages today. CEO Mary Dillon knew how to change the strategy by focusing on deep customer insights that led her to make space for more online sales, a loyalty program now 40 million members strong, and a retail experience offering low and high-end products to meet everyone’s needs.
But what about Gen Z? ULTA figured out it wasn’t just make-up to them. They wanted to try exciting emerging brands, find sustainable products, and learn new ways to use the products. The team at ULTA knew that women at all ages bought a variety of products, expensive and reasonable, and brought their daughters and parents along with them. The stages of life played a role into what products they would offer along with tapping into experiencing products physically in the store. This multiple-phased approach led to the understanding that ‘sparking joy’ means something different to women, and the brand and communications strategy needed to reflect that, not just for Gen Z.
“I think beauty care has this higher-order benefit: it goes from beauty, to wellness, to joy. I think joy is what we’re all reaching for.” – Michelle Crossan-Matos, ULTA CMO
To get to the essence of what your brand value means to various segments, it’s in the emotion of how the products make customers feel that ULTA really turned around their strategy. ‘Joy’ means something different for Gen Z, Millennials, Moms, Gen X, and Boomers. Knowing your segments starts with listening, more research, and a custom strategy to meet their needs. All of this without alienating your core customer base is the key.
“Gen Z is attracted to self-expression, individuality, and price.” – Retail Dive
To understand brand value, we must look also at the mega brands and their journey to how they got to be a household name. According to Interbrand, the average brand value of a Best Global Brand has reached over $3 trillion, a 16% rise from 2021. In 2022, we saw the fastest rate of brand value growth ever recorded, demonstrating the contribution a company’s brand has in driving its economic success. While financial markets vary, the value of the world’s strongest brands has steadily increased driving customer choice, loyalty, and margins. For example:
Apple helps us Connect, Do, Belong, Play, Pay and – more recently – Thrive.
Google helps us get many jobs done, like Learn, Connect, and Move.
Nike helps us Thrive and Express ourselves – Just Do It.
How did these mega brands get to that strong value? By listening first, believing in their customers, bringing their employees along with them in their journey, and going beyond the metrics to find the story and the emotional connections to the brand. The understand brand value more fully, focus on these four areas:
Financial performance of products/services
The success of your brand can be seen in its sales. This is the most straightforward metric in this equation.
Role in purchase decisions
Determining how much your brand plays a role in purchase decisions was traditionally measured with the three A’s - Awareness, attractiveness, and availability.
The purchase funnel today has changed. With social media and a variety of buying options, understanding where and when your target market shops is critical to informing your marketing strategy.
Brand loyalty
A growing trend is in knowing what a brand stands for – its belief system. Younger consumers want to know what a brand cares about and how they stand behind it. Conducting research beyond your core target market is where loyalty can begin to grow. Understanding your competitive strength in the marketplace and investing in areas where you can differentiate your brand is the key.
Emotional connection
This is the part most people fail to measure but may be the most important to unlocking future value. There may be an emotional connection to the brand from childhood, a recent experience, customer service responses, and other events that can best be understood with qualitative research.
Do you know what your brand stands for?
Loyalty is not lost for your brand, but there are new ways to understand and strengthen it with your customers and employees. To get started, Conversate Labs offers end-to-end brand strategy and insights to transform the next generation.
