Thursday, November 20, 2008

Creating Brand Relevance

Several months ago I wrote a column, "The Reality of Branding." When that was published it was suggested that I follow-up that column and discuss how marketers can make what they sell more relevant to those who purchase that product or service. Said differently, how can marketers better connect with prospects and their real needs?

Branding has less to do with product features/benefits and more to do with customer needs, wants and aspirations. Without insights into the prospect’s attitudes and behavior as they relate to the product, branding assignments can be pretty speculative and highly risky. Brand relevance comes only from a genuine understanding of the stated (and unstated) needs and wants of the target market. How do we get at these needs and wants?

If “location, location, location” is the success formula in the real estate business, “research, research, research” is a key ingredient of successful branding campaigns. Unfortunately, many businesses are unwilling to invest in (or don’t understand) the strategic research that might reveal unknown customer and prospect needs/wants.

If you are interested in getting to know your customers/prospects a lot better, a good place to begin is with a Segmentation Study of your industry. This type of quantitative research will tell you how the industry is segmented in terms of different buying preferences/motives. After all, not everyone purchases your product or service for the same reason.

How large is each segment of the market? Do your customers segment the market as you do? Which brands do customers associate with each market segment? What product performance issues are most critical to each segment? What brands are most relevant to each segment of the market?

Once you know something about how the industry is segmented, it might be helpful to know how your customers actually use your product or service and how they feel about using it. This type of research (also quantitative) is called an Attitude & Usage (A&U) study. Larger marketers conduct an A&U study every few years.

Importantly, A&U studies attempt to get at exactly how customers relate to brands. What are they happy about? What product improvements do they want? What needs are not being met by the current brands in the marketplace? Do they use the product exactly as the marketer designed it to be used? Marketers are going to understand a lot more about how relevant their products and services are to their customers when they invest in an A&U study.

If “location, location, location” is the success formula in the real estate business, “research, research, research” is a key ingredient of successful branding campaigns.

At this point someone must be saying, “But what about focus groups, aren’t they valuable?” Focus groups are certainly valuable at exploring the range of feelings customers have about the market and the product/services being evaluated. However, focus groups are probably the most misused research technique on the face of the earth. There are a number of reasons for their misuse.

First of all, they are relatively cheap to do and if your budget is small, you can do them and feel like you have done some marketing research. Second, what one hears in a focus group tends to be what one wants to hear (selective retention). I can recall more than one discussion following a focus group where we argued about what the respondent was really saying in the group. Third, if you don’t know squat about research, you think you sound smart saying, “lets do some groups to see what we learn.”

What is so bad about focus groups? Nothing -- if you are going to follow them up with some of the studies mentioned above. But many marketers don’t ever follow them up with quantitative research. Thus, important marketing decisions may be based on what 15-20 people said in a room to/with folks they had never met before.

One-on-ones, a variation on focus groups, puts one interviewer with one interviewee, allowing for greater confidentiality and perhaps greater learning about needs, wants and product usage. However, they are also a qualitative research method and suffer from the problems associated with qualitative research.

Legitimate marketing research is not cheap. However, the more you know about your prospect and their needs, the better you can design your product or service around meeting those needs. Then, when you set your ad agency team loose on a branding project, they won’t be asked to perform miracles, just to communicate a relevant benefit clearly to your prospects.

[This article first appeared in GSA Business. Photo used under the Creative Commons License courtesy of Flickr.]

2 comments:

  1. We have all heard about the 80/20 Rule - 80% of your profits come from 20% of your customers, but how many companies have actually conducted the analysis to identify their TOP TIER customers? When I was with Unilever, we worked with BJ's Club Stores to identify their TOP shoppers and target them with Unilever Branded offers and promotions. I can tell you that our response rates were 4-5 times greater than average AND we saw an 8% lift in HH'S who never redeemed a coupon! Key takeway - investing in target segmentation will maximize your ROI.

    ReplyDelete
  2. We have all heard about the 80/20 Rule - 80% of your profits come from 20% of your customers, but how many companies have actually conducted the analysis to identify their TOP TIER customers? When I was with Unilever, we worked with BJ's Club Stores to identify their TOP shoppers and target them with Unilever Branded offers and promotions. I can tell you that our response rates were 4-5 times greater than average AND we saw an 8% lift in HH'S who never redeemed a coupon! Key takeway - investing in target segmentation will maximize your ROI.

    ReplyDelete