Businesses are failing to lock in long-term growth, according to new research from Kantar, the world’s leading data, insights and consulting company.
Kantar’s latest study, Mastering Momentum, which analysed 3,900 brands in the BrandZ™ database over a three-year period, found:
Fewer than 6% of brands grew market share over one year
Only 6 in 10 of those sustained that gain over three years
And fewer than 1 in 10 (of the 6 percent) improved on their initial gain, leaving a small “One Percent Club” of brands that have mastered the art of building sales momentum in the long term.
The analysis reveals many brands could be sitting on a potential growth goldmine. And this opportunity is not only reserved for small businesses; 2 out of 5 of the biggest brands managed to hold ground or grow between 2015 and 2018. Brands that are getting it right include Disney, Orange and Adidas, all featuring in the 2019 BrandZ™ Top 100 Most Valuable Global Brands ranking, while also making some of the biggest gains in market share, according to the analysis.
Research conducted by Kantar last year revealed that only 52% of advertisers are confident their organisation has the right balance between long-term brand building and short-term performance marketing.1 The new report recommends marketers focus on three key points in the buyer lifecycle to create sustained growth:
Experience: influence repeat sales by delighting existing users, as they are the foundation upon which growth is built
Exposure: influence future sales by reaching out to new potential buyers and establishing meaningful difference through compelling creative and targeted media investment
Activation: influence immediate sales by ensuring the brand and its meaningful difference come readily to mind at the point of sale.
According to Kantar’s analysis, the brands that managed to move to the needle across all three activities achieved 65x more growth than average. The study also found that brand size significantly influences growth prospects, making it critical for businesses to balance investment across brand building and demand generation accordingly.
Commenting on the findings, Nigel Hollis, Chief Global Analyst, Insights Division at Kantar said: “Sustained, long-term growth is hard, but there is a huge opportunity for businesses that are willing to look beyond simply delivering the next quarter’s numbers. Brands that tailor a growth strategy relevant to their market position outperform those that only grow penetration by an average of 45%.2 Small brands have little choice but to focus on increasing acquisition from competitors, while market leaders need to invest in improving the experience for existing customers, and, to a lesser degree, bringing in new category buyers. The brands that concentrate marketing investment into the moments that matter will be the ones that thrive and grow regardless of fluctuations in the global economy.”
Effective growth marketing starts by identifying what behaviours brands need to change to increase market share. To help brands understand the impact of marketing activity in real-time, and make better long-term business decisions, Kantar has introduced artificial intelligence and advanced modelling techniques into its brand guidance systems. These solutions deliver agile insights that provide an overall view on both current and future brand performance. Marketers can also analyse the performance of individual campaigns, which helps them to quickly course correct and optimise investments.
Claire Spaargaren, Global Brand Guidance Director, Insights Division at Kantar said: “The rapid proliferation of data in today’s connected world gives marketers access to more metrics than ever before. But the most readily available data, such as raw searches, sales and clicks, focuses attention on what’s happening here and now, so it’s no surprise that the activities that demonstrate an immediate return tend to win out in the competition for budget. It’s hugely important for brands to understand the bigger picture. Our latest global BrandZ™ report clearly illustrates the financial impact a strong brand can have on delivering superior shareholder returns. Identifying reliable short-term indicators of long-term success is the first step marketers need to take to unlock future brand growth.”