Lisa Hezila, Country Head of Renoir Consulting, Malaysia, and former Group Managing Director of Young & Rubicam Group/VMLY&R, shares her insights with Business Today on how brands can influence the minds of people through a stream of experiences.
Firstly, we need to come to a common definition of what do we mean by “branding.”
It’s all about being “mentally sticky” in a world of clutter – in a way that leaves people with a lasting, positive impression (and in the long-term a reputation). And businesses do this, consciously or unconsciously, through its interaction with their stakeholders – be it via their product experience, customer service, the retail experience, the advertising, etc.
Every action of the brand results in an interaction with a stakeholder of the brand – and this can include customers and potential customers, employees and even partners/suppliers – across every touchpoint (e.g. product, customer service and communications), is branding.
Branding isn’t something brands can own externally. In essence, it exists in the minds of people.
Why should businesses invest in branding in the first place?
Well, what is the alternative? Leaving it to chance?
The hesitation to “invest in branding” is partly due to the common misconception that only the communications part of marketing is “branding”; but in actual fact, branding is about nurturing your brand’s reputation, which stems from someone’s total experience of your brand, directly or indirectly. Every business that has an opex and capex are directly or indirectly investing into branding.
The question is: are you doing it strategically and investing in the right places?
Thus, investing to improve your product; your customer service – online, in-store or by phone; your retail experience; your website/app experience; your advertising – enhance customer’s delight – which improves brand reputation; and ultimately are acts of branding.
Don’t forget the basic human perception. We prefer to buy from people (and by extension, brands) that we like. That’s why customer’s delight a.k.a branding is so important.
How has it change over the years in the era of social media
Looking at the bigger picture – one has to recognise the arrival of the global access to the Internet which made the world become more cluttered; democratisation of access via ecommerce has made the world one huge shopping mall.
We have almost-infinite access to every product and service imaginable (around 12-24 million ecommerce sites globally, more being added each day).
But, now, social media comes into place, as a means of making sense to it all.
Social media is our “shortcut” – helping us “curate” the sea of choice – to give us a manageable list of options to consider. Social media does this particularly well because we’re easily swayed by the opinions of people – it’s a trust thing!
So, we use social media to transfer the brand reputations we build in our heads to others.
How branding has helped businesses
There are multiple benefits of a strong brand – beyond pricing (increasing the perceived value of a particular product or service; reduces price sensitivity), it also reduces substitutability (brand choice).
We’ve been seeing successful branding being deployed, especially direct-to-consumer (DTC) brands.
Digital-first brands like Grab is an excellent example of branding done well with emphasis on addressing customer’s pain points and the positive experience by its platform users. A focus on delivering real utility to users is what Grab is doing, to go beyond incentivising usage through rebates and discounts.
What these brands do is quickly establish its brand reputation by positioning themselves as the “People’s Champion” – an approach deployed in categories fraught with consumers’ pain points.
Many startups and businesses which question the traditional categories of business model will ensure more value reaches the end-consumer rather than being stuck in the middle due to inefficiencies and profit-taking. These companies need to maintain a good pulse of the market and their category users. This is where Renoir comes in to help clients set up robust Marketing Information Systems (data and insights on the consumers, local competition, local/regional/global trends) that feeds into the product creation and development process, tracks the stages of the product’s portfolio, and provides a decision matrix outlining governance across the product’s lifecycle.
For some industries, the focus of branding is to drive premium pricing; however, the other common application is driving choice at the point of sale. As many purchases are done with low mental processing (such as food and beverages; household cleaning products), getting the sale boils down to being “mentally present” in people’s mind at the point of purchase.
It’s critical that the communications approach to branding nudges customers to make a purchase decision in favour of the brand.
How branding has impacted businesses in terms of value or revenue growth
In context to the attribution of brand’s value to financial performance – a contentious point due to the subjectivity of valuation methods – there’s a lack of robust research in this space especially among non-listed companies.
However, many studies come to common conclusions:
Intangible assets become more important in today’s financial environment. Brand value is considered as a competitive advantage. Businesses with strong brands outperform the general market (especially during volatile times).
A depiction on how Starbucks charge more than RM10 as an acceptable price premium for a cup of coffee is proof of the business branding, Samsung’s ability to rise above its now-almost-forgotten Samsung Note 7 catching fire/exploding (resulted in a recall and airlines ban) shows the power of the brand and how WeWork’s ability to command the reputation and thus initial valuation it had, clearly shows the power of branding.
The rise of DTCs and its impact on the market (usually followed by its acquisition by market incumbents) also shows that great branding undoubtedly helps lift a business above the clutter of choice and advertising out there.
Source: https://www.businesstoday.com.my/2020/02/13/you-dont-own-your-brand/
