This thought was prompted by a comment made by one of our clients. Usually when we talk about the benefits of developing a strong brand we focus on its potential to amplify gains, to sell more or to price higher; but what if the greatest benefit of a strong brand is to help a business survive setbacks?
We all know (or should know) that you cannot just focus on growing penetration in order to grow market share. If all your actions are focused on growing penetration, the chances are that any gains made will be offset by losses as existing customers defect. Whatever brand you manage, be it a packaged goods brand (where people typically switch within a repertoire of acceptable brands), a durable or a service (where no decision is the best decision), the challenge is to minimize churn (and ideally upsell when the opportunity arises).
In this context, a strong brand is an indicator that you are delivering a positive brand experience; one that increases the probability that people will choose your brand next time they make a choice in the category. However, market share often erodes not because you did something wrong, but because someone else did something right. New, disruptive offers may well attract your customers to switch.
In that context, a strong brand can help slow down attrition and give a company time to respond. Even in these days of 24-hour news and social media, it takes time for people to realize that there is a new competitor. If your existing customers are not already looking to switch your insulation comes from people not thinking to check out alternatives.
Existing, satisfied customers are less likely to seek out alternatives. It is not just that they do not think to search for alternatives, it is that they like their existing brand and would be loath to change, it just feels wrong. I get that feeling every time I buy analgesics. I know the store brand is the same stuff as the branded product, but it takes conscious effort to override the instinctive belief that there is something better about the brand. The strength of this influence likely differs by category, but even when it comes to buying a new car, if you had a good experience with the old one it can be tough to consider a different make.
Lastly, a strong brand can confer the benefit of the doubt even when people have a bad experience. As I have noted elsewhere, it is not the experience that really matters but how it is remembered, and a strong brand can help people downplay bad experiences. ‘Oh, I was unlucky’, or, ‘No one else seems to have had the same problem’. How the brand resolves a bad experience can have far more influence on the individual’s reaction, but if the brand’s reputation is good, a positive outcome is more likely.
Data from the BrandZ Top 100 Most Valuable Global Brands ranking demonstrates that strong brands recovered from The Great Recession more quickly than weak ones but the same sort of resilience may help brands all the time. Might resilience be a strong brand’s greatest benefit?