brand value creation — customer
Today I’m launching a short series on brand value creation. My intent is to outline the ways brands create value, organizing the points by the four quadrants of The Balanced Scorecard.
But let me give you the background first. The other day, a colleague* and I were discussing the role of marketing and the bad rap that marketing and marketers sometimes get. We agreed that certainly some people misuse marketing, using it to manipulate and deceive; but on the whole, we believe that marketing is a good thing. “Marketing is really a service,” my colleague affirmed.
The discussion got me thinking about the role and value of brands — I firmly believe a strong brand is a good thing and actually have included a section in the first draft of my book about the value the brands create. So I wanted to share my thoughts here and get your reactions and comments.
Because there are so many ways that a brand creates value, I’ve adapted The Balanced Scorecard, the performance management tool introduced 15 years ago by Robert Kaplan and David Norton, as an organizing framework. I find The Scorecard serves as a helpful tool for identifying all of the areas of a brand’s positive impact. In fact, examining the benefits of a strong brand across the four sections of the Scorecard — Financial, Customer, Internal Business Processes, and Learning and Growth – reveals how critical one is to a business.
Today’s post covers brand value creation from the Customer perspective (the next 3 posts will deal with the other 3 quadrants.) The obvious impact brands have on customers makes the Customer quadrant of the Balance Scorecard the easiest of all to adapt to detail the benefits of a strong brand.
Generally speaking, brands help customers navigate the myriad of choices they face in today’s marketplace. The average supermarket has 25,000 products on its shelves. There are nearly 19,000 restaurants in New York City alone. Americans have over 19,000 magazine titles and over 115 television channels to choose from.
Here are a few ways brands simplify and facilitate purchase decisions, thus creating value for Customers:
- A strong brand gets people’s attention and puts specific products and services on their radar screen. It helps customers find the product, service, store, or experience they’re looking for. Plus brand awareness and familiarity alone have been shown to lead to brand liking. As such, a brand can reduce the perceived risk of a new purchase simply by being well-known.
- Furthermore brands help customers edit their choices more easily and quickly because the associations people have with different brands help them differentiate between choices. If, for example, you are looking for a nutritious cereal, you would look for the Total cereal brand; whereas a search for a fun, kid-friendly cereal would lead you to Cheerios instead. You easily distinguish between these choices based on the associations you have with each brand.
- Providing reasons to buy is another way brands impact customers. By embodying meaningful benefits that represent value to customers, brands encourage purchases. In today’s economic environment, brands actually help customers justify their purchases — to themselves and to others. And in some cases, brands help justify paying more for something.
Some might accuse brands of having too much of an impact on customers, blaming brands for the over commercialization of our culture. The counter argument says that brands serve as engines of our economy, driving business growth, improving people’s lives, and contributing to the progress of society. Net net, I believe the positive value created by brands for customers outweighs the negatives.
Check back in a couple of days for my thoughts on brand value creation from the Financial, Internal Business Process, and Organizational Learning and Growth perspectives. In the meantime, I’m eager to hear your comments on how brands create value for customers.
* Thanks goes to Brad Bennett for inspiring the series — Brad is a dear, dear friend and former colleague (we worked together at Spiegel catalogs, which was my first job out of school!) Brad runs his own ethnographic research firm and is a valued strategic adviser to Kraft, Clorox, and other big brand companies.