What should brand managers do when consumers are jaded
about brands?
It’s
a fair question. Consumers are more worried about getting out of debt than
engaging in consumption other than necessities and a few small “luxuries” these
days. They’ve forsaken favorite brands in droves to purchase comparable, less
expensive store brands, sometimes for good. What does this tell us about the
staying power of national brands? What does it say about branding itself? Has
it become a useless marketing exercise?
The
markets have always ascribed brand value as a significant intangible asset; one
that can comprise a significant percentage of companies’ overall worth. Yet, Young
& Rubicam’s John Gerzema and Ed Lebar’s research in their book “The Brand
Bubble”, demonstrates there is a wild discrepancy between financial markets’
brand valuations versus consumers’ brand value perceptions. This was uncovered before
the malaise concerning the economy. Then Saatchi
& Saatchi CEO Kevin Roberts famously stated: “Brands have run out of juice.
They’re dead.”
With
this sluggish economy, The Wall Street Journal recently cited the rise of the
“zombie consumer”. Quote: “Forget the
vampire craze. Investors should focus on zombies instead. Zombie consumers,
that is. In the same way corporations were ‘walking economic dead’ in Japan
after stocks and real estate collapsed there in the late 1980s, zombie U.S.
consumers today could be similarly destined for years of retrenchment, notes Stephen Roach
chair of Morgan Stanley Asia. That doesn't bode well for vigorous economic
growth.” What does this say for the health of brands?
Let’s note, though, that there are exceptions among
consumers. Young demographics, kids and tweens, are very brand conscious
because they are susceptible to marketing messages. Upscale consumers have
largely returned to luxury brands. But what about everybody else? Teens are
increasingly hard to reach by brand messaging. They’re skeptical at best and
not likely to be swayed by advertising or blatant marketing via social media
but by their own peers and WOM (word of mouth). Most adults, occupied by other
concerns, are likewise harder to reach. Besides, even when times were good and
they were flush with cash, they tuned out most advertising messages. And let’s
remember that consumers’ trust has repeatedly been violated by formerly
venerable brands. No wonder they’re jaded!
All of this gives us pause, doesn’t it? Especially
since 70% of our economy is tied to consumer spending. So what are brands doing
in response? Promoting on price. Couponing. Advertising. Making loyalty
programs more attractive. Oh yes, and innovating. A constant article and blog
stream talks incessantly about the importance of innovation: it’s do or die. Is
it important to innovate? You bet. But all of these incentives aren’t achieving
brand loyalty as they used to. Now why is that?
Let’s ask a few probing questions.
- How is the quality of the brand product these
days? Has it been cheapened to cut price?
- Does the product work as it should? Does it
deliver on its promise and meet consumer expectations?
- Has there been incremental innovation in the
brand that delivers what the customer is looking for now?
- Is there more perceived value in the product? Or
is it viewed by consumers as “the same as everything else”, or worse, not
as good?
- How’s service these days? When consumers call or
email the company directly or walk into a retail store, are they being
helped with their product questions by knowledgeable, courteous employees?
- Do company employees understand the brand,
embrace it and faithfully represent it to the customer?
- Are consumer problems resolved quickly,
thoroughly and to their satisfaction?
- Has repeated consumer disappointment led them
away from the brand, or has the brand used every negative as an
opportunity to turn it into a positive and build trust?
- Has the brand segmented its varieties well to simplify
the merchandising process for retailers and the purchasing process for the
consumer?
- What do consumers say their experiences are like
when interacting with the brand at every level? Are they consistently
good? Or is “inconsistent” a better way to describe them?
- Lastly, who’s in charge of the brand now, the
company or the consumer?
Make no mistake. Consumers
are still motivated to purchase the latest and greatest, thus the need to
continue to innovate. But for the foreseeable future, that motivation is being
somewhat tempered by economic reality and a host of factors whose answers are
revealed by these questions.
When companies react to
economic downturns by making poor decisions with their brands, they diminish
the power of those brands in the eyes of consumers. Let’s be honest: many
companies have made numerous decisions that have had negative repercussions for
their brands in recent years, well before the downturn.
Strong brands are a manifestation of strong companies. Enduring brands are the result of cohesive internal
and external commitment to aligning core values that are consistently maintained; that are exemplified by each employee and
each customer interaction with the brand. They are not subject to the whims of
rotating executives in the C-suite or to changing economic conditions. They’re
the product of a company that lives by values from the top down: transparency,
honesty, a willingness to own problems and correct them, a commitment to
quality and value.
Strong brands resist the urge
to cheapen the quality of their products so they can lower the prices. The
long-term damage to the brand is not worth it. The smart companies manage their
inventories wisely, cut dead items out of their lines and focus on delivering
value, incremental innovative features and solid customer experiences. They
ride out the storm and come out of it stronger for having maintained their
brands well.
Knowing that consumers
increasingly hold the key to brand success or failure; that social media makes
it possible to disseminate information, discontent and positives at Mach speed
ought to reinforce the need for strong brand standards. So are brands dead or
dying or are the companies that hold the brands not as strong, committed and
passionate about their customers as they should be?
Consumers have to be given a
“reason to believe” – now more than ever so that when the dust settles on this
economic cycle, the brand is still standing and poised to go to the next level.
