Should Your Brand Focus on “Energy” To Drive Growth ?


What if I told you that one of your core beliefs about brand equity is wrong? If you’re like me, you were trained to believe that as a brand manager, you should define your key brand equities, develop marketing programs to communicate these to consumers, and over time, “own” these attributes. If you believe that, you’d be right, but not totally so. It seems there’s a special kind of equity your brand needs to own these days. And one that very few brands understand, much less drive.

Brand Market Value vs. Brand Consumer Value

In recent years, brand value has climbed inexorably higher, as measured by Millward Brown’s Brand Z Most Powerful Brands and others. Using the Millward Brown data, brand value climbed from 5% to 30% of the S&P market cap over the past 30 years. Brand experts cheered; it was an implicit endorsement of the great brand building efforts across companies.

Brand Market Values Rising vs. Consumer Brand Equities Falling -- A Brand Bubble ?

Brand Market Values Rising vs. Consumer Brand Equities Falling -- A Brand Bubble ?

But, a curious thing was happening. Brand equity measures, as measured by consumers, were falling.  Traditional measures such as awareness, trust, etc., were eroding based on surveys by Y&R Brand Asset Valuator (BAV). How could this be? How could market driven brand values be going up, while consumer driven brand equity scores were going down?

Causes of Declining Brand Equity

John Gerzema and Ed Lebar of Y&R think they know the answer. The markets were wrong. Brands and branding are in a serious state of disrepair. In their excellent and well researched book, “The Brand Bubble,” they cite the following for the deteriorating health of brands. They are declining because of:

  • Excess Capacity– There’s been an explosion of choice. Consumers are drowning in more products and services than ever. There is less differentiation and greater commoditization.
  • Lack of Creativity – With more choices, consumers increasingly look for creativity and unique experiences from brands. Yet most brands today are highly similar, and deliver modest incremental improvements.
  • Declining Trust – Brands considered trustworthy have eroded from 52% in 2007 to 25% in 2006. Why? Public scandals, corporate misdeeds and institutional crises. Perhaps more important is transparency of information on the web—no brand can hide or say things not consistent with reality – authenticity counts.

You may or may not agree with these causes. What seems inarguable is this – key brand equity measures have generally declined over the past 20 years.

Growing and Successful Brands

There is a small minority of brands that are growing both market brand value and consumer brand equities. Companies as disparate as Google, Subway, Lego, Dove and Axe have shown it can be done. When Gerzema and Lebar searched the data to understand what was driving this growth, they identified a new factor – “brand energy.” They describe energy as “the consumer perception of motion and direction in a brand.” They describe brands with energy as being irresistible and differentiated because they:

  • Move with innate purpose and conviction
  • Constantly reinvent themselves
  • Engage consumers on their own terms
  • Compel devotion
  • Move culture and categories

Branding Implications – From Current to Future

What’s interesting about their learning is the following: it refocuses marketing from what the brand currently delivers—a static state–to where the brand is going. Motion and direction mean the brand is going somewhere. Consumers want to be with brands that are on a compelling journey. They want brands that:

  • Create a sense of mission. Dove is about redefining beauty.
  • Continually surprise and delight them with new products and services. The iPhone and apps.
  • Engage them in a conversation, not talk at them. Subway’s fresh, healthy tips for parents.
  • Creatively use new communication channels. Best Buy people on Twitter.

These are behaviors consumers expect from great brands—now and in the future. There’s an implicit “contract” these brands have with consumers that says: we will be dynamic and ever changing in meeting your needs. And the brand is as much about the future as it is about the present.

This change in orientation from the current to the future is a huge mindset change for most Marketing organizations. Going forward, brands will still need to stand for important functional and emotional equities – bigger, faster, better, etc. What’s different is that to be successful, brands will need to spend an equal amount of time and effort communicating and delivering what they’ll be in the future. Because the most successful brands will provide energy–direction and motion that helps take consumers forward to where they want to go—not just stay where they are.

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6 Responses to Should Your Brand Focus on “Energy” To Drive Growth ?

  1. Craig says:

    This is an interesting puzzle and the Millward Brown measures are very interesting. One shortcoming of the methodology is that it might overstate ‘intangible earnings.’ This measure probably captures some lurking variables since goodwill is no longer depreciated as of 2002. ‘Mark to market’ models for brand value tend to be opaque and more susceptible to managerial and auditor discretion, so it’s at least debatable that this is a reliable measure of brand value.

    One potential confounder is that agglomeration economies may have given larger companies a comparative advantage in the age of globalization. This might have been less a function of brand value than a historical conjuncture that allowed these companies to take advantage of advances in communication technologies and the formation of a global marketplace. This is all to say that brand value may be more in line with consumer value than we currently think?

    This post also proposes some solutions to this problem, which I think are right on. Companies that invest more in R&D and less in overhead tend to provide consumers with better value. Companies that provide usable open source platforms improve brand loyalty by crowdsourcing innovation. The bottom line is that companies that are dynamic and constantly improving consumer value/the usability of their product receive a premium. They are unpredictable in that they produce things that the consumer wouldn’t have guessed were possible, or have a material impact on their quality of life.

    Since consumers are faced with more and more choices, the idea of bounded rationality becomes increasingly important. I would wager a guess that brands that provide better customer value will also enjoy a premium for their product, and those that don’t will see diminishing returns.

    • beardrs says:

      Hi Craig — Thanks for your comments and your interesting perspective. Independent of the market brand valuations, the data regarding the erosion of brand equity ratings seems unassailable. Personally, I think the authors of Brand Bubble are on to something important with their identification of “energy” as a key brand equity driver. I think Marketers need to delve into this concept more deeply to dissect and understand what exactly it means for their brands and how to drive it. As a concept, it breaks new ground and should be the stepping stone to better understanding what works in today’s increasingly chaotic and fragmented brand world.

  2. […] ? Well, I don’t have access to Subway sales vs. target, but at least one recent book, “Brand Bubble,” by Gerzema and Lebar, identifies Subway as one of the few brands that are growi…. What’s not to like about a brand that delivers compelling, relevant content that’s […]

  3. Tim Guen says:

    Randall,

    Your post is a real thought-starter, and a useful alert for all brand managers who are willing to see their brand’s anatomy through a different lens.

    I’d like to offer some additional insights to the brand “energy” discussion. With all due respect to the keen observations of the two ad execs, there is a fuller explanation provided through the realm of social psychology. Over 30 years ago, Joseph DeRivera published “A Structural Theory of the Emotions”, in which he concluded that every stimulus (e.g. a brand offering) creates an emotional response from its recipient, and that these feelings have direction and strength akin to relative movement. The basic directions are either “attraction” (two forces moving toward each other), “aversion” (two forces repelling each other…analagous to magnetic force. The strength of the energy is measured by passion, which directly correlates to motivation and action. Many brands create only mild emotional response, and thus can never create a change in consumer behavior, like trial, switching or loyalty. If you think about it, people simply don’t act on things they feel mildly about.

    Counter to the Gerzema/Labar view (and this is my interpretation…not DeRivera’s), a strong brand actually doesn’t move, in the same way that the sun actually doesn’t rise and set every day. The apparent motion is simply a measure of the emotional content (attraction/aversion and passion) created by the brand offering, as felt by the recipient. I would certainly agree that brands with a noble social agenda can create passionate attraction and hence differentiation (examples: Timberland, Whole Foods, IKEA, Toyota), and a stronger sense of belonging than brands whose scope is narrower. But to nitpick for a second, consumers aren’t drawn to brands that are “moving”, they are drawn to strong brands because of how it “moves” them.

    Apologies for the side trip into the world of emotional theory. The more exciting news for brand marketers is that you can get a full understanding of the emotional structure of your brands, and thus attain a far deeper level of insights into brand meaning than traditional metrics. I recommend Resonance Insights as a leading provider of emotion-based customer insights and brand equity measures, http://www.resonanceinsights.com.

    Randall, thanks again for raising the flag on this intriguing topic.

    • beardrs says:

      Tim — Excellent perspective, and thanks for taking the time to read the post and share your thoughts. The fact that we are having this discussion is an advance from the old model of simply focusing on an emotional benefit, a functional benefit and a good reason to believe. Discussion, debate and more incisive thinking are what is needed for brands to drive higher relevance — emotional or otherwise. My interpretation of Gerzema/Lebar’s concept of “energy” is that it describes a passionate attraction to a benefit or cause, as you say, AND that consumers have a sense that the brand is going to consistently work to deliver against this in interesting and novel ways–hence a feeling of energy and movement, with the focus on the benefit or cause of most interest to the consumer. It is axiomatic that the benefit/direction is one that is moving to consumers. Beyond this, they need to feel that the brand is relentlessly focused on delivering this in an active and energetic manner.
      Randall

  4. […] The Hyundai brand is clearly one of the few auto companies to be driving both sales and brand equity, consistent with some of the learnings described in a previous post, “Should Your Brand Focus on Energy to Drive Growth?” […]

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