This is a defining time for brands, especially during the shifting landscape of the COVID-19 pandemic. Resilient and authentic brands will survive, especially those who put being socially responsible for their customers, employees and partners at the center of their business. Now is the time to be there for our customers; brands will be measured by how they act and how they show up for their customers, employees and partners. Doing good trumps looking good, period. I thought it timely to repost a blog of mine from last year (with some new adds) that resonates maybe even more so today. As always, please stay safe, best to you and your families.
At our last Wharton Customer Analytics Initiative (WCAI) event, we met in San Francisco for a discussion titled, “It’s a Modern Marketing World: Creating a Frictionless Customer Experience.”
During that discussion, host Professor Eric Bradlow, faculty director of the WCAI, brought up a key point that struck a chord with me. “Marketing builds brands. Time kills brands.”
Bradlow’s statement is rooted in his research. From my perspective, it is also proven from experience. It is a stark reminder that brand equity, the commercial value that is derived from consumer or customer perception of the brand experience (rather than the product itself), is both dynamic and fluid. Regardless of industry, size or standing, building and maintaining a brand still remains one of the biggest challenges facing any CMO. Followed closely by improving customer experience and driving measurable growth for the business.
Measuring Brand Equity
The study of brand equity has long been of great interest to marketers, CFOs and CEOs. Strong brands are often associated with financial and marketing advantages including greater customer loyalty, less vulnerability to competition, improved margins and less sensitivity to price changes. In fact, brand equity has been largely recognized as one of the most valuable assets of an organization.
Bradlow’s research illustrated that a company with an excellent brand equity, has the power to charge a premium price for its products because of its brand. This direct link to pricing and consumer preference makes brand building, and understanding how brand equity impacts customer choice, a critical function of marketing that leads to better marketing strategies for businesses.
He went on to state that, at its most conceptual level, many marketers accept the broad definition of brand equity to be “the added value to the firm, the trade, or the customer with which a brand endows a product.” While this definition may be accepted as an industry standard, it has not been reflected in most analytical models concerning brand choice.
The old way of approaching brand equity from an analytics perspective was to simply state that strong brands are “more preferred.” Bradlow’s point is that modern thinking now shows there is more to brand equity than just favorability. This includes:
- Understanding how brand equity impacts customer choices,
- Customer experience is the new brand, and
- Appreciating that strong brand equity leads to growth.
Ensuring that brand equity is being calculated accurately, using these factors, determines how much a company will invest in marketing. A data model which ignores these variables can lead to substantially different pricing decisions that can impact your bottom line.
When taking into account Bradlow’s assertion that brand equity is dynamic and changes over time, marketing executives must be thinking about ways this fluidity impacts their data models—a complex, but important task to ensuring your brand, and your business, stay relevant.
For the CMO, the challenge is not to wrestle with and compound these complexities, but rather to simplify and reduce them to deliver accurate and timely answers - insights that directly impact the health of the business. This is something we are helping our customers solve on a daily basis.
Making it Personal
When I first joined Teradata in March 2018, we were a nearly 40-year-old brand with a rich heritage. Yet, for all the years spent building and nurturing brand equity, time seemed to play the biggest role in chipping away at the company’s perceived position in the market. We have always had great products, amazing employees and incredible global customers, but we needed to focus on restoring some of the brand equity that we let atrophy.
We decided to simplify—to shift back to our core capabilities and double down on our mission: We transform how businesses work and people live through the power of data.
We started with a transformation strategy (a multi-year effort) that was well on its way when I joined the company. The timing was right to support a repositioning and rebranding, which included “Voice of the Customer”-driven research into our vision, mission and purpose. Why did we matter? Why should our customers care? In order to successfully reposition the company, we had to first bridge two brand gaps:
1) Brand Perception: We allowed time to erode our brand. While our strategy, offerings and company had changed, the market perception had not, and;
2) Brand Awareness: We had not invested in brand equity for many years and the awareness of our brand had eroded.
Understanding and quantifying our brand value in the market through data and analytics was a key component to this undertaking. We’ve operationalized as a marketing function what we preach as an organization—leveraging data to solve our largest business problems and gain insights that give us a competitive edge.
Why is Customer Experience the Most Important Investment a Brand Can Make?
Now that we have completed the initial work of repositioning, rebranding and rebuilding brand equity around the new Teradata, our challenge is to maintain and build upon the initial work we’ve already done. But this work is just table stakes—today 89% of companies compete primarily on the basis of customer experience, compared to just 36% in 2010. While 80% of companies believe they deliver “super customer experiences,” only 8% of customers agree.
Everything a brand does—the way it markets, conducts research and communicates, in both physical and digital environments – plays a role in shaping the customer’s experience. Focusing on customer experience may be the single most important investment a brand can make in today’s competitive business climate and will be the building blocks and focus of our brand and growth strategy moving forward.
We’re hearing some of the most meaningful examples of maximizing customer experience from our own customers. One example is Swedbank, who integrated and then acted upon their customer data to design and deliver a consistent customer experience across channels. Another is Air France-KLM, who seamlessly aggregate and analyze structured and unstructured data to identify pricing and promotion opportunities, minimize and manage churn, and optimize web and call center experiences.
There are many more stories on our website, as well.
The positive feedback we are hearing from our customers (regarding our brand as well as more potential equity for their own) leads us to believe we are on the right track. However, we need to remain steadfast in our commitment to be insightful, forward-looking stewards of the Teradata brand, and more importantly, customer experience.
While there were many answers gleaned from our discussion at Wharton, the key takeaways for me center around how brand equity is built by marketing, eroded by time and that customer experience is the new brand.
Moreover, data and the massively important role it plays in building brand equity and maximizing customer experience is a keenly important vision for customer engagement and experience. This means leveraging data to sense and respond intelligently to customers. In short, our vision for customer engagement and experience is powered by data, scaled with automation and personalized at scale.
We look forward to our future work with Wharton, the inspiring Professor Bradlow and its Customer Analytics Initiative, and the opportunities to have these valuable discussions with our customers and leading thinkers in this space.
To learn more about how Vantage Customer Experience can address some of the CMO’s biggest challenges, try our Demo.