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Brand-Building Processes: From Volume to Density

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If one issue has dominated the marketing agenda in recent years, it is brand-building. The connection between a solid brand, customer loyalty, and greater profitability makes brand-building especially attractive in today’s turbulent environment.

Nowadays, marketing is concerned not only with increasing market share and determining how and where to identify potential customers, but also with figuring out how to keep customers and transform them into brand ambassadors, thereby boosting profits in the medium term. More emphasis is now being placed on economic sustainability than on chasing temporary increases in market share. What’s behind the $850 invoicing differential between active and inactive customers at Harley-Davidson? Why is there a difference of more than $3,000 between a highly connected Starbucks customer and someone who visits the chain only sporadically? Do we need to keep focusing on sales volume, or should we redirect our attention towards profit margins and stability?

Brand-building is an effective tool for escaping the inflation spiral associated with the generation of differential elements that complicate the product and erode profit margins, and for breaking through the opaque wall of a supply oversaturated with purely functional sales promises. A brand is not just a name that identifies a product or service; it synthesizes and represents the values on which a true bond with customers can be built.

A brand doesn’t merely reflect what a product does for you—its functions and differential attributes for satisfying tangible needs. It also reflects what the brand says about you, what sort of lifestyle it represents. These insights are essential to market mobilization. If we think of customers solely as buyers, then we fail to understand that when they purchase something, they do it all themselves—with their head, their heart, and their values. If we overlook this, we miss the chance to activate a more intense dimension of the relationship. Products are not just things; they also represent meanings.

Brand-building is an effective tool for breaking through the opaque wall of a supply oversaturated with purely functional sales promises.

Structure and meaning

Traditional brand-building models, like those used by many agencies, emphasize the identification of functional, expressive values that are central to the brand. Through communicative actions, these models attempt to lay the groundwork for building a connection with customers—in other words, the foundation of a stable relationship.

However, in order to generate profitability through customer loyalty, the brand must go further: it needs not only a structure (container) but also meaning (content). If brands have value, it is because they “can be weighed,” and their weight is a function of volume and mass: brands should be dense. A brand with density has texture and temperature. This is what Pepsi is doing with the Pepsi Refresh Project, and what Harley-Davidson is doing with its Posse Rides.

Brand co-creation between the customer and the product generates interaction that increases the temperature, making for a warmer relationship. Socialization processes—which social media can help with—allow brands to become a part of vital practices and take on meaning in relationships between people, thus transcending a mere commercial relationship.

Similarly, the generation of experiences around a brand creates the appearance of a brand “in motion” and in use: it’s not about selling products, but selling moments. For example, you don’t sell a trip to the Dominican Republic, a can of cola, and a Havana cigar separately; you sell the satisfaction of enjoying the moment and watching a sunset over the Caribbean while enjoying a drink and (for those who smoke) a good cigar.

By generating meanings in this way, through the activation of experiences of use and consumption, brands can insinuate themselves into a narrative that facilitates the discovery of the who as opposed to the what. Products must be infused with personality artificially, but it must never sound contrived. The who enables a brand to forge a better connection with customers.

The connection between the brand and loyalty is justified because it appeals to customers as people, not merely as buyers.

Establishing the connection

Brand-building processes require simultaneous coordination between two strategies. First, a structure must be created that gives volume to the brand. The product, its functional characteristics, and the rational values it is associated with play fundamental roles in building the structure. The product in its functional dimension is a necessary—but not sufficient—condition for the brand to exist. Second, the socialization and experience-generation processes must be activated and stories must be incorporated into the creation of meaning and the mobilization of feelings and emotions. These are sufficient—but not necessary—conditions for the brand’s existence. Thus, the necessary and sufficient conditions for a brand’s existence—the “if and only if” of the brand—arise from a combination of functional elements enriched by emotional elements.

The connection between the brand and loyalty is justified because it appeals to customers as people, not merely as buyers. This humanization of the sale activates symbolic elements that increase the brand’s density, generating a warmer texture in the relationship. The connection between loyalty and profitability depends on the activation of factors that increase income (higher average expenditure, more revenue from cross-selling, more movement in the product selection, lower price elasticity, etc.) as well as others that reduce costs (winning over customers, optimizing the portfolio through standardization processes based on greater and better knowledge of what customers want).

Loyalty occurs when customers freely decide to embrace the company’s offering. The effect of loyalty is that the customer sticks around for the long run. Loyalty activates drivers that generate profitability. There is a temptation to simplify the process and confuse cause and effect; this leads to the adoption of practices more closely associated with customer retention than with true loyalty—which, in order to be effective, must be given freely.

The seduction of customers is grounded in the creation of meaning with narrative components. By telling a story, you can reveal meaning without committing the errors associated with simplifying a mere definition. To paraphrase Balzac, chronology—the mere accumulation of data—is the storytelling of fools. Since customers are never fools, you must captivate them by incorporating your product into a story that gives it full meaning. This is a task not only for advertising but also for corporate communication, social-media management, and the rich, vast set of below-the-line actions at our disposal.

The logic is clear: for a brand to be truly narrative, you must tell the story of the brand (communication), tell stories around the brand (advertising), incorporate the brand into stories (product placement), and share this story with customers (co-creation via social media). If your company takes responsibility for brand-building, its commitment to customers will grow, and vice versa.

 

Juan Luis Martínez Sánchez, Professor of Marketing at IE Business School.

© IE Insights.

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