Do Brands Disappear?

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A company called 24/7 Wall St. has published a list of brands that it predicts will “disappear” in the near future: Sears, Sony Pictures, Nokia, and Saab are among the ten names that are doomed. It’ not a bad list, but it could tell us a lot more about brands.

Its methodology is based on analyzing some broad publicly-available criteria on business performance, such as steep losses in sales and customers, rapidly rising costs combined with an inability to raise prices, and dubious announcements about future strategy from company leadership.

This is all fine and well — in fact, I’d argue that these qualities are among the drivers of brand health, in that they measure a company’s ability to deliver on its promises to consumers — but they only reference the operational inputs into brands. That’s really important, but they say nothing about brands. Further, predicting that businesses that operate crummy, unsustainable businesses are going to disappear sometime soon isn’t such a miraculous example of precognition, is it?

There are many ways to measure brand value and strength. Most of them originate from consulting firms that make a living delivering branding campaigns, so the methodologies are somewhat introspective…well, to the point of constituting professional navel-gazing. They’re certainly not proscriptive, in that they yield no data upon which future business decisions should be made; instead, they’re simply meaningful in and of themselves. This is one of the primary reasons why, even after more than a hundred years of business experience in a media-aware world, many companies are still somewhat suspicious of branding or, conversely, are happy to use the term to talk about just about anything or everything related to marketing.

Branding is to business what happiness is to life. A nice thing to have, even if every attempt to quantify and deliver is only subjectively true and rarely repeatable.

I’ve maintained for years now that there should be ways to approach brand measurement with more clarity, and with the purpose of identifying the impact brands have on business performance. I came up with something I call “The Dim Bulb Equation,” in which we could measure specific brand influences, like:

  • Time: the average percentage of time savings realized in new product development (concept to first sale) vs. two lesser-well-branded competitors. Well-known brands should have an easier time identifying the products its customers want.
  • Cost: the average cost-savings of the development process vs. two main competitors. Better brands should be able to create things not just faster, but more economically, than lesser-known names.
  • Marketing: the ratio of total marketing expenditure over that of two main competitors (“for every x we spend, they have to spend x + y”). Awareness of a brand should make it cheaper to tell people things.
  • Efficacy: the ratio of the efficacy of the last 3 ad/marketing campaigns over those of two main rivals, expressed as an aggregated return for every dollar spent (“for every x of money spent on a campaign, we collected y percent more than they did”). Branding should provide an umbrella that makes tactical marketing work better.
  • Premium: the average price surcharge collected for a top-selling product over those of two main competitors’ top products (consumers and customers should be willing to pay more for those brand benefits beyond functional attributes).
  • Loyalty: the average percentage of customers who’ve endured a product failure, corporate crime, or other negative impact to a brand vs. those of one lesser-known brand name in the same business category. If people have relationships with brands, they’ll act on them.
  • Retention: the average duration of customers sticking with a business that is greater than the average duration of those patronizing two competitors (a strong brand should engender strong loyalty).
  • Jobs: the average discount employees are willing to take in order to work for a brand over the average pay scales in the same business category. Bigger discount means the brand is worth more.
  • Valuation: the actual dollar amount that a reputable investment firm will go on the record (in print, publicly) stating that a business will achieve through nothing more than its brand awareness. This number is usually zero.
  • Addiction: the number of times a business has rebranded itself over the past 20 years, the bigger the number the worse things are. Successful brands build equity consistently over time, don’t they?

If a list that looked at these sort of measures might yield a more substantive picture of brand strength and value than looking at business operations alone (or, conversely, looking only at communications-driven metrics of brand awareness, likability, etc.). Would the same companies still be on 24/7 Wall St.’s list? Maybe, but if they were, it could be more legitimately called a list about brands.

It would also have to find another word for the disappearing claim, since brands don’t disappear. They were never here in the first place. Brands are ideas that command our attention or fade into the background. Companies disappear when they go out of business, but brands are always lingering in the ether, haunting our memories and challenging us to care. Measuring what companies and consumers do with and about them might be really useful.

I wonder why nobody does it?

(Image credit: haunted by an old brand)

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