The Power of Corporate Brand from BrandZ
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At this year’s Responsibility Business Week event in the UK on Trusted brands: what behaviours help companies thrive in today's marketplace? Nick Bull, Senior Director at Millward Brown presented new research which shows that the most trusted brands in the global BrandZ Top 100 ranking have grown 170% since 2006 – almost double the rate brands with average levels of trust. Take a look at his presentation and notes here.
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The Power of Corporate Brand from BrandZ
- 1. THE POWER AND CONTRIBUTION OF THE CORPORATE BRAND 1 9 t h A P R I L 2 0 1 6
- 3. 3 100k BRANDS 400CATEGORIES 3mCONSUMERS 50MARKETS 4.5bn DATA POINTS The largest brand database worldwide
- 4. 4 RepZ Measuring the Power and Contribution of the Corporate Brand
- 5. Four factors influence Corporate Reputation 5 SUCCESS RESPONSIBILITYFAIRNESS TRUST Innovative/Leading the way Offer investors a good financial return Charge fair prices Deal fairly with suppliers and other companies Socially responsible Treat employees well Environmentally responsible Can be trusted HARD SOFT
- 6. Computing RepZ - factors have different contributions 6 35% 32% 17% 16% SUCCESS FAIRNESS RESPONSIBILITY TRUST
- 7. Benefits of high RepZ: Better performance on Key Brand Metrics 7 16% 21% 7% 8% 12% 17% 10% BRAND PROMISE CONSIDERATION TRUSTWORTHY RECOMMENDATION BRAND CLARITY BRAND PREMIUM BRAND POTENTIAL % that brands with strong reputations (top third) exceed those with weak reputations (bottom third)
- 8. Company Reputation Brand Reputation One without the other is less valuable Company and Brand Reputation: Two sides of a coin
- 9. (31,652 brands/companies 2010-2015 in 100 groups in rank order of corporate reputation) Company better corporate reputation Companymoretrusted R² 0.849 Two sides of a coin: Companies that are more trusted have a better reputation R2 = 0.85
- 10. Two sides of a coin: Trust for Companies comes from having trusted brands (31,652 brands/companies 2010-2015 in 100 groups in rank order of Companies you can trust) Company more trusted Brandsmoretrustworthy R² 0.9658 R2 = 0.96
- 11. Two sides of a coin: Trustworthy brands are more successful (31,652 brands/companies 2010-2015 in 100 groups in rank order of trustworthy brands) Brand more trustworthy Higherbrandshare R² 0.981 R2 = 0.98
- 12. Average Global Value Growth 2015 vs 2006 “Trustworthy” Above average $37bn +170% Average $23bn +84% Low $19bn +38% Common brands in each year from BrandZ Top 100 Most Valuable Global Brands BIG POINT: Trusted brands GROW business value
- 13. The average RepZ score is 100 Scores over 105 demonstrate reputation superior strength, under 95, relative weakness. RepZ Scores of the Top 10 Most Valuable Global Brands in 2014 Source: Global RepZ 201413 118 105 120 150 111 113 123 106 105 124 $158.8bn $147.9bn $107.5bn $90.2bn $85.7bn $80.7bn $79.2bn $77.9bn $67.3bn $64.3bn
- 14. Three Tips on Measuring, Managing and Maximising Corporate Reputation 14 MEASURE TRUST ALONGSIDE OTHER CORPORATE REPUATTION MEASURES MAKE NO DISTINCTION BETWEEN THE CORPORATION AND YOUR BRANDS THE REUNIFICATION OF CORPORATION AND BRAND CAN HELP RESTORE AND SUSTAIN TRUST 1 2 3
- 15. Building trust in your brands and adding the corporate side of the coin will add $value Bonus Tip
- 16. 38% +170% Trust $Value -8% +7%Average Average +1% trust could add up to 1% in value per year* *Per Year extrapolating from the Top 100 Most Valuable Brands
Editor's Notes
- Good morning It’s great to be here with you all this morning Can you please raise your hand if you believe you work for a trustworthy brand or corporation Thank you – about XX% of you! Interesting! TRUST is becoming the new differentiator for brands TRUST is highly prized because it is so rare Sadly, however, people today expect betrayal – by companies, governments, religions, sports bodies – you name it People have not abandoned the need to trust – they just seek it elsewhere – in each other And its one reason people find social media more authoritative than paid for marketing
- My name is Nick Bull, Senior Director at MBUK based in Warwick Millward Brown specialises in brand, comms and media research working with 90% of the worlds top brands My role is to help our business grow By placing trust in the clients we work with, esp. new clients who have not worked with us before Over next 10 mins I aim to highlight the importance of trust and other measures of corporate reputation in helping businesses grow
- To do this I’m going to draw upon BrandZ This is the world’s largest database of brand equity, which MB manage on behalf of all WPP Group agencies Last 20 years, 3m consumer interviews, covering 100k brands in that time, 400 categories, 50 countries
- Within the study (since 2010) we’ve created a new measure called RepZ RepZ measures corporate reputation – from the consumer’s POV A corporation being defined as the parent of the product brand that consumers interact with In some cases the corporation and the brand are the same entity More often they’re not But as will go onto see their reputations are always interrelated
- Corporate reputation emerges from consumer perceptions of both current and past performance RepZ divides these perceptions into 4 component parts: Success – one of the most important drivers of RepZ – innovation, product quality and financially stability Fairness – indicates how consumer’s feel about the corporation’s reputation for pricing and its relationships with suppliers, customers and others companies Responsibility – concerns a corporation’s reputation for being respectful of its employees, concerns of the the environment, and being socially responsible Trust – meaning the consumer believes the corporation will consistently deliver on its promises These 4 components move along a continuum from characteristics that can be seen as “HARD” practical business considerations (market performance) to other important issues seen as less core and therefore “SOFT” (good citizen) Success today requires integrating these components into all levels of the business This requires an attitude that begins at the top and permeates throughout the organisation
- Based on extensive analysis of the BrandZ database, we find that the 4 factors vary according to their contribution to RepZ score The 4 components are weighted as seen on the slide: Success and Fairness together account for two-thirds of RepZ score – about one third each Responsibility and Trust make up the other third – about one sixth each Trust, as you can see, is actually the lowest of the 4 factors – but on of the hardest to score well on!
- Consumers feel measurably more positive about brands offered with strong reputations Positive RepZ strengthens brands at each and every point on the Path to Purchase e.g. corporations that score high in RepZ (top third) are 21% more likely than poor scorers (bottom third) to have their brands included in the consideration set. But consideration is just the start Strong reputation also drives the ability to charge a premium, improve brand potential and strengthen customer loyalty In other words, a positive RepZ score strengthens consumer’s relationship with a company’s brands at each critical point from the initial encounter through experience and ultimately including them in their brand repertoire
- What we’ve learned is that company and brand reputation are two sides of the same coin In short, you need both to work together synergistically One without the other is less valuable Often we find that companies are working in silos when it comes to brand management and corporate affairs That’s hopeless! We really need to think about integrating these functions together in the future We can see how this plays out when we look at some key measures from Brandz …
- Asked my colleague, Peter Walshe, to investigate the relationship between brand and company measures Sent me loads of charts that looked a bit like this – just wanted to show you 3 of them: This analysis is VERY robust and VERY compelling It’s based on 31k+ brands/companies, 2010 – 2015, clustered together in 100 groups for convenience First Point: Companies that are more trusted have a better overall corporate reputation For all you geeks in the room – strength of the correlation is 0.85
- Secondly … Trust for Companies comes from having trusted brands This is ultimately what matters – the products and services that consumers buy The promise you make and keeping that promise is crictiical
- Third point: Trustworthy brands are more successful Dramatically important point for each and everyone of you in the audience – me included Brands that are trusted more sell more and enjoy higher market share – they are more successful Again, we see a near perfect correlation – amazing! Make sure you send this chart around your entire organisation, frame it and stick it in your reception
- So far, so good We can see the importance of trust in driving market performance We can then go 1 step further For last 10 years, MB have published the Top 100 most valuable global brands (wave blue book) Essentially putting a $value on world’s most successful brands – the intangible assets I thought you might find this analysis interesting – it shows the growth in brand value for those brands in T100 over last 10 years Those brands that score above average on ‘trustworthy’ have grown their value by 170% - awesome!
- So let’s look at the Top 10 most valuable brands – this is looking at data in 2014 The average RepZ score = 100 Scores >105 demonstrate reputation strength Scores <95 demonstrate weakness First point – all T10 brands RepZ score is 105 or above – the correlation between corporate reputation and brand value is not surprising Second point – the brands don’t score equally high - we do see big variation in RepZ scores (Marlboro at 105, Microsoft the highest at 150) Third point – their scores on the components that comprise RepZ score vary enormously Whilst most of the Top 10 score high on the success component, the levels of fairness, responsibility and trust are uneven e.g. Apple scores lower on Fairness – seen as expensive e.g. Microsoft scores lower on Trust So whilst brand value and strong reputation correlate closely, how brands achieve strong reputation varies, and most brands, even the world’s most valuable, have room to improve
- So, 3 tips on measuring, managing and maximising Corporate Reputation FIRST – you need to measure Trust with your consumers and determine areas where a lack of consumer trust may be justified SECOND – Corporate and brand reputations reinforce or erode each other – they are 2 sides of the same coin THIRD – if you are having problems, uniting the brands and the corporation will help to restore and sustain trust over time None of this is easy and as we all know, trust can be eroded quickly and won’t be restored over night Some consumer attitudes are simply out of your control, esp. those on social media A generalised sense of distrust attaches to many categories whether merited or not These presumptions make the work more difficult, but more necessary
- Nick’s bonus tip: READ verbatim
- In more practical terms, every %point you can build on TRUST perceptions could add up to 1% in value per year So if you are working for one of the Top 10 brands, that could add another $1bn Simples!