TIME TO THINK OF DISRUPTION AS A GROWTH OPPORTUNITY
Disruption, successful disruptive brands have shown tremendous and rapid growth over the past 10 years whereas the growth of more established brands seems dwarfed in comparison. Our recent analysis of 2000 brands measured in the BrandZ™ global database over three years, between 2014 and 2017, found that fewer than one in 10 brands grew.
Amazon is the archetypal disruptive brand. By making people’s lives simpler, less expensive and more convenient Amazon has grown its brand value by 2,228%, far outdistancing the BrandZ™ Top 100 Most Valuable Global Brands, which grew by a creditable 152%.
Sadly, Amazon is the exception not the rule. Most brands were stuck in categories where no brand achieved significant growth. In the same three years Amazon doubled its brand value.
So how can a brand ensure it is one of the few that does grow? We cannot all work for an Amazon, a Netflix or an Airbnb but even a 1% change in market share to an established brand can be very valuable. The rest of this report documents how conventional brands can learn from the disruptors and create opportunities for growth if they add a little disruption into their marketing mix.
Between 2014 and 2017 fewer than one in 10 brands grew.
1. GET OUT OF THE COMFORT ZONE
“If you decide that you’re going to do only the things you know are going to work, you’re going to leave a lot of opportunity on the table.” – JEFF BEZOS. FOUNDER, CEO OF AMAZON
Most established brands operate in a comfort zone of business as usual. Existing practices and protocols encourage doing more of the same. Routine and inflexible budgeting limits creativity. And, dare we say, research data often supports staying in that comfort zone. This is not the fault of data – it’s how the data is analysed, interpreted and applied to decision making. Data should always be used to inspire growth not limit it.
Any brand can be disruptive provided it does something different from the norm that creates new value for customers or unlocks its existing potential. Disruptive brands are seen to be extremely different from their competition and so too are the brands that grow over time. In both cases difference is what provides a brand the opportunity to disrupt.
Simply changing the way a brand communicates with potential customers can allow them to see the brand with fresh eyes and unlock new growth potential.
Our data suggests that any brand can be disruptive, provided it has the courage to do something different and meaningful. Established brands should never stop trying to identify the next big innovation, but, in established categories, even relatively small changes can enhance the consumer experience and add significant value to customers’ lives, in turn growing the value of the brand.
Brands like Nike, Starbucks and Hilton have created apps that either enhance people’s lives or make the brand experience more convenient. And, of course, the ‘Internet of Things’ presents huge opportunities for increased brand engagement provided people find it meaningful. But disruption does not have to be a ‘thing.’ Simply changing the way a brand communicates with potential customers can allow them to see the brand with fresh eyes and unlock new growth potential. Adidas, Subaru and Snickers have each reaped significant benefit from changing their communication strategy and connecting with consumers in a new and different way.
2. KNOW WHAT NEEDS TO CHANGE
Knowing how people think, feel and behave in relation to a brand can often reveal an immediate opportunity for growth. Perceived differentiation proved to be the leading indicator of success for the 6% of brands that did grow over three years. Similar to much more disruptive brands, these growing brands started out as more different than expected. The challenge for a well-differentiated brand is to identify what will make it more salient and meaningful to potential consumers.
Perceived differentiation proved to be the leading indicator of success for the 6% of brands that did grow over three years.
In China, research for a new smart TV brand identified that it was perceived as different from the competition but the brand was underperforming on Meaning and Salience. We recommended that the brand focus on it’s advanced technology. This provided the best opportunity for the brand to impact willingness to buy while also helping to improve quality perceptions. The client acted on the advice and the new campaign drove a 42% increase in market share.
3. KNOW WHO VALUES YOUR BRAND
Most marketers assume that growth means attracting new buyers. But customers must be willing to pay a price, a fee or exchange personal information to use a brand, and the ability to command a price premium has significant profit implications. Over half of all buyers, in almost every category we study, select brands first and then consider price. On average, consumers pay 14% more for brands that they perceive to be meaningfully different. When it comes to profit, the biggest disruptive growth opportunity may come from targeting the right customers, and then curating perceptions of meaning and difference to drive up the brand’s perceived value.
Over half of all buyers select brands first and then consider price.
Subaru’s path to growth in the US began by identifying driver types willing to pay a premium for all-wheel-drive cars, and creating ads that would appeal to each group. But by 2005, most major competitors offered an all-wheel-drive option and Subaru needed to change its strategy. The ‘Love. It’s what makes a Subaru, a Subaru.’ campaign was introduced in 2006, along with a program to improve the dealer experience and expand the dealer network. The emotionally based advertising focused on longevity, safety, versatility and adventure. But the stories were as much about the owner and their family and pets as they were about the cars. This unique approach has helped grow perceived differentiation, meaning, market share and, most importantly, it helped make Subaru one of the most profitable automotive brands in the US.
Knowing what needs to change, both in terms of behaviours and attitudes, is important if a brand truly wants to disrupt. That objective then informs what types of marketing activity are most likely to make a difference and what needs to be measured to judge success.
4. USE CONSUMER INSIGHT TO INSPIRE DISRUPTION
An established brand that lacks differentiation risks being commoditised. Product innovation is the obvious solution but it’s not the only one: design, distribution, customer service and communication strategy all offer the potential to change people’s appreciation of a brand. A disruptive idea may come from anywhere but the ultimate test is whether it resonates with the target audience and this requires in-depth knowledge of your potential customers. Behavioural data will always provide marketers better measurement of purchases and choice but it won’t tell them about people’s unspoken needs, motivations or the role brand memories play in their purchase decisions.
A disruptive idea may come from anywhere but the ultimate test is whether it resonates with the target audience and this requires in-depth knowledge of your potential customers.
Bringing together multiple data sources, both behavioural and attitudinal, is fundamental to identifying the best growth opportunities. We recently helped an established global beverage brand assess different strategic options to optimise its brand positioning for long-term growth. To start the project, we analysed existing data from previous brand studies, sales data, and copy testing to quantify the brand contribution to sales. This analysis identified the brand idea most likely to resonate with customers, and to have a direct impact on brand and long-term sales. We then pre-tested the idea to determine if it was strong enough to be developed. The outcome was the creation of a new campaign that drove double-digit sales growth for the brand over the prior year.
Changing consumer perceptions is not the only path to growth. The Clear shampoo brand increased its e-commerce sales in Japan by 171% by switching from a B2C model to a B2B model. The brand, which ranked 12th in its category by consumer purchase intent, faced a major challenge if it was to grow by traditional consumer marketing.
Clear’s solution was to change the playing field. Rather than selling direct to retailers for consumers, the brand promoted its Headgear Cover Plan, encouraging businesses to supply Clear shampoo to employees required to wear protective headgear in the workplace. In this case, instead of data simply confirming the size of the problem it acted as a catalyst to inspire a whole new approach to how the brand was sold.
5. INVEST TO MAKE A DIFFERENCE
Simply spending more will not produce disruptive returns. A great creative idea that fits the brand and the opportunity will be the best way for many brands to disrupt the status quo, whether it is realized in-market as an Alexa skill, a useful app, a socially led Instagram campaign or a purpose-led program. And while marketers are hostage to the product innovation cycle, the impact of a new creative approach may come faster.
Our analysis of search and social data highlights the power of creativity. On average we observe a linear return in social brand mentions to increased weight of spend, but a strong, creative campaign will leverage this spend to create far more impact. And whatever form an execution takes, effective creative development and testing before launch can ensure it is likely to achieve the desired objectives.
A UK price comparison website faced decreasing share of search which was a key source of web traffic and sales. New creative immediately boosted the volume of brand-related social comments per GBP spent by five times the average, indicating strong branded impact. Most important, search doubled, helping to increase revenues by 14%.
Compared to weak campaigns strong ones generate nearly 11 times the number of tweets per $ spent.
This said, it is also important for marketers to scale their budget according to the task at hand. Far too many marketing initiatives fail simply because too little is invested to ensure campaign success. Databases built across multiple brands and categories allow marketers to benchmark brand objectives against norms and to scale media investments appropriately. Research designed to understand the relative impact of different media channels, when combined with reach and cost data, can help shape cost-effective integrated media campaigns that leverage a great creative idea to best effect.
6. LEARN FAST TO ACHIEVE BETTER RETURNS
“If you’re good at course correcting, being wrong may be less costly than you think, whereas being slow is going to be expensive for sure.” – JEFF BEZOS. FOUNDER, CEO OF AMAZON
A brand can have a great product or idea and in-market execution can still fail to disrupt. Marketers need to behave as if they are in perpetual beta, which means fast feedback is essential so they can quickly identify opportunities to course correct. Even the most optimistic marketers want quick reassurance that their campaign is a winner. Sophisticated analysis of search and social data, combined with timely survey data, can quickly identify if a campaign is on track for success.
7. CONTINUOUSLY IMPROVE YOUR MARKETING EFFECTIVENESS
Today’s success is an opportunity to improve current marketing effectiveness while looking for the next disruptive growth opportunity. But to do so marketers must measure what is happening to the brand and the consumer response in-market. Existing studies of brand and advertising performance provide the data to optimise future spend. Analysis of previous campaigns can help identify which media channels are most productive by brand, category and country, improve digital ROI or bridge the ostensible gap between behaviour and attitudes to gain a holistic understanding of brand growth.
DISRUPT TO GROW YOUR BRAND
Every brand has the power to disrupt business as usual provided it has a clear idea of what will make the most difference given its status and context. Too many brands give up the opportunity for growth by assuming that differentiation is impossible. Our data proves that differentiation is not only possible, it is imperative. Established brands should learn from the disruptors that are changing our world and create a little disruption of their own to drive growth. But to effectively identify and manage opportunities for disruption, it’s important to understand exactly how people think, feel and behave in relation to a brand. Marketers need up-to-the-minute information on how potential customers view their brand and its activities to have the confidence they need to disrupt and grow brand value.
Culled from Kantar Millward Brown BRAND GUIDANCE