It’s not always easy to spot when your brand is falling out of favor with consumers, especially if, on the face of it, things look healthy.
Several years ago, John Gerzema and Ed Lebar talked about a brand dilemma that is perhaps as pertinent today as it was then. Brands in their thousands they said were continuing to lose ground across key measures such as awareness, trust, regard and admiration. Most were stalled in terms of their ability to generate consumer interest and preference. But many brand owners were less concerned than they might be because they were focused on the apparent escalation of value being attributed to their marques and/or to brands generally. The authors also voiced concern that this expanding value growth was actually focused on a smaller and smaller set of core brands. They identified what they saw as “a mismatch between the value that consumers saw in brands and the aggregate value that the markets were ascribing to them”.
I don’t think that gap has narrowed. If anything, it’s got harder to spot when a brand has shrinking brand equity. Consumer participation with brands is now so inculcated into how we shop that it can be difficult to know how conscious the choices being made really are. I alluded to this in a recent article when I examined the motivations for loyalty vs convenience. That means that even stable brands are more susceptible to changes in consumer focus/interest than they might like to think they are. Meanwhile the apparent value of their brand assets continues to climb.
So what should brand managers and owners be looking for to assess the overall state of their brands? There are plenty of obvious signs when a brand is out on its feet. Here are 60. It’s less obvious when the top-line sales numbers and even the annual brand valuation figures are showing no cause for panic. That doesn’t mean that a brand is safe. Here are five tell-tale signs that things might not be quite as they seem.
1. Static Status – if your brand is becoming more and more dependent on its incumbent status to explain its right to compete, your brand is probably trading on its history. Every brand needs to be forging forward with a clear vision of the future it is forming for itself and why that will involve and engage its consumer base. If your brand lacks that inherent momentum to reform, revamp and revitalize, then it is becoming progressively less interesting, and it is only a matter of time before it loses ground. Increasingly, it will stop acting and just react. Every brand must trade on the equity it has, but it must also understand that brand equity is like fuel. Unless it is constantly renewed and re-affirmed, it will run dry.
2. Bottom-Line Alarm – while volumes may continue to look healthy, if the returns are slipping that’s a sure sign of lack of traction: either you’ve lifted costs to try and keep up (but you’ve not been able to lift prices to compensate); or you’re wedged into a market where profitability generally is on a falling tide; or you’re being closed out by others, who have forced you into a tactical/price war, in an increasingly desperate attempt to maintain relevance and presence. You need to re-assert your value and your confidence in that value, or risk further decline.
3. You’re Selling – But You Don’t Care – when the signs of success turn inward and you start measuring your gains by results that actually require your people to work against your customers in order to hit their metrics, you are pushing your brand into a downward spiral. The numbers may continue to look good, they may even improve, but if you are not taking customers with you, the victories will soon ring hollow. As Paul Friederichsen observed in an article on brand empathy, “Brands exist in that mystical, magnetic force between consumer and brand. That bond can only be established and maintained through understanding of the consumer’s desires and needs.” If your brand is making money at the expense of your consumers, that force is being extinguished one customer at a time through every “success” your brand has.
4. The Challengers Are Mounting – if you find yourselves being nipped at the heels by an increasing number of upstarts, it’s a sure sign that they (and probably the wider market) perceive you as valuable and vulnerable and/or they see potential in the space you occupy and are prepared to take you on for part of it. React quickly, assertively and confidently.
5. You’re Not The Subject Of New Conversations Anymore – if the market’s not talking about your brand, you are on your way to being anonymous. Your revenues may still be healthy, but as your reputation fades, you’ll open the door for others to question your authority and to even paint you as arrogant and presumptive. Valuable brands are active brands. And in many sectors, activity is judged by consumers as what hits their screen and captures their eye. So many brands fade because they don’t take the time to share their stories or because they don’t think that matters if they’re busy. Find ways to become and remain a talking point. Or lead the conversation in areas that others can’t and that the market is interested in.
No brand can simply rise and shine forever. At some point, you will succumb to the strategies of your competitors, the changing desires of your customers, the whims and wiles of fashion, the shifts in economic activity or the decision of the market to price you at a level that you deem unfair and that sends damaging signals to the market. To some extent, any or all of that is beyond your control. The brands that recover will be those that see what is happening and make conscious decisions to address what’s happening. The brands that don’t will fall away.
Written by Mark Di Somma at Branding Strategy Insider