Strong products and services are highly differentiated from all other products and services.
Never has a sentence about marketing received more head nods and less true understanding than the sentence above. It’s a statement that has always been an accepted part of marketing lore, and one that became fact when Young & Rubicam actually spent the money, build their “Brand Asset Valuator” and proved it.
Relevant differentiation was found to be a leading indictor. (Any idiot can be different. The tricky part is to be different in a way that is relevant to your audience.) Traditional measures such as knowledge and esteem were found to be lagging indicators. These lagging indicators (the ones we seem to spend so much time and money tracking) degrade slowly and can Â be artificially maintained through marketing expenditure or price discounting. Thus, by the time they start to fall off, you might already be in a ton of trouble.
I’ve always found it fascinating that the consumer packaged goods industry is so full of B-word job titles: Brand Directors, Brand Managers, Brand Assistants, etc. At the end of each year a lot of very smart brand people get their report cards. Revenues, cases, market share, profitability, distribution- the list is long and comprehensive. But the most important measures are usually nowhere to be found:Â Is your product or service differentiated in a way that is meaningful to your audience? And did that difference increase or decrease?
In most companies, astonishingly, differentiation isn’t even tracked. Keep in mind, the people behind all this are brilliant people; some are the superstars of the marketing and management world. Certainly they are smart enough to know that important things get measured- and that those things that are measured tend to show up in their evaluations and determine their bonuses. So if difference isn’t measured and case volume is, guess which one gets priority whenever they come into conflict (such as the end of the accounting year)? “You’ll weaken your brand position” almost always loses out to “If I don’t provide a deep discount and launch that line extension I won’t make my volume forecast.”
Brands are built by intelligent and creative marketing. Marketing is all about positioning. Positioning is all about differentiation. Track that differentiation and you’re able to track the creation and evolution of your brand. But don’t stop there. You should also track specific outcomes. For example, track the premium that people are willing to pay for your product over a generic product, and use the resulting data as a proxy for brand strength and use it- along with all the other business measures. An accurate and trended measure of differentiation can be a great tool (see Y&R about their Brand Asset Valuator), but simple measurement and accountability count most in the end.
When I was at Kellogg’s (pre-Brand Asset Valuator, and so long ago it hurts), we simply measured the value of our brands by comparing them to house brand equivalents. The difference in perceived value was measured once a year and then tracked. We were less interested in the absolute difference than we were in the trend. An upward trend meant good brand stewardship, while a downward trend meant poor brand stewardship and the need for intervention.
It really is that simple.
Tune in next week for more on creating real difference from Austin McGhie.