Last year, before COVID-19 reared its ugly head, Kantar issued a report called Mastering Momentum, which asserted that brand which grow most strongly focus their investments across three stages of the buyer lifecycle: experience, exposure and activation. Updated with another year of BrandZ data, the new findings confirm that brands need to generate growth across the buyer lifecycle.
The updated analysis based on 5334 brands measured across a three-year time frame in BrandZ finds that a small group of brands grew claimed bought last by an average of 48% over the three-year time frame. These over-performers account for only 4% of all brands measured but include many globally familiar names, like Adidas sports goods in the UK, Disney Resorts in the USA and Instagram in Russia, along with local brands like Wardah beauty products in Indonesia. What this disparate group of brands have in common is that they over-performed at each of the three stages of the buyer lifecycle. And, importantly, they demonstrate that bigger brands are not destined to decline. On average these brands had a 10% claimed market share in the first year of the analysis and still grew.
While the COVID-19 lockdown has choked off the growth of brands like Disney Resorts, the learning from the Mastering Momentum analysis will be relevant to any brand that needs to restart its growth engine following the end of lockdown. The essential lesson is that no one action is going to be enough to help a brand regain momentum. Brands must invest at different points in the buyer lifecycle, anticipating that some actions are more likely to pay off in the long-term than the short, but knowing that they are all equally important to growth.
What do marketers need to focus on in order to regain momentum? Let’s take each stage in the buyer lifecycle in turn, starting with experience.
While we all know brands need to build penetration in order to grow, what is less obvious is that every customer that is retained or buys again is one less that needs to be replaced by acquisition. Your existing customers – or the ones that were your customers before lockdown – are the foundation upon which growth is built. Ensuring that your customers are reassured, enthused and offering easy ways to shortcut the renewal or repurchase purchase are going to pay off, although not necessarily immediately, because people will only reconsider their brand choice when the time comes to buy again. While packaged goods might be bought 3 or 4 times a year, the typical inter-purchase interval for durables and cars will be measured in years. Perhaps for this reason, because the BrandZ data set covers a wide variety of categories, in our 3 year time frame over-performing at experience only added 6% points of growth to the cumulative 48% achieved by over-performers.
While experience is the foundation for growth, good activation is critical particularly as lockdown ends and people start to make new purchase decisions. Good activation has an immediate impact on sales and in our updated analysis over-performance at activation added 13% points to growth by converting people to choose the brand during search and shopping. If anything, this is an under-estimate of the influence of activation, because good activation is about more than persuading the uncommitted, it is also about ensuring that people predisposed to buy your brand follow through on that intent. However, unless someone is predisposed to buy your brand, activation will have to work harder to convince the uncommitted shopper and will likely rely on margin eroding price discounts.
Many brands have gone dark during the COVID-19 lockdown. For some, there was little choice, but others did so through an excess of caution. Unfortunately, this decision may prove to have negative long-term ramifications. Exposure is the process of influencing people to desire your brand, before they even need to renew their choice or before they buy the category for the first time. As such, it is about influencing future sales and making it easier for people to choose your brand and pay the price asked when the time comes to buy. Building exposure is a vital part of building penetration. In our analysis we found that over-performing at exposure added an average of 29% points provided the brand also over-performed at experience and activation.
The Mastering Momentum analysis confirms that not only does increasing exposure have the most influence on growth across a 3-year time frame, weak performance at exposure cannot be remedied by over-performance at experience or activation. Under-performing at experience drops the average growth from the high of 48% to an average of 29% points. Poor activation lowers growth still further to 18% points. But underperforming at exposure lowers the average brand growth over three years to negative 4% points.
As lockdown restrictions are relaxed around the world and people return to more normal lives marketers will need to re-stimulate demand for their brands. In the U.S. there are already signs that demand is recovering with retail sales bouncing back from the low of April. Whether the recovery lasts, or a resurgence of the virus forces another lockdown is unclear. What is far more obvious based on the learning from Mastering Momentum is that, tempting though it may be, a single-minded focus on sales activation is unlikely to get a brand back onto a growth track. Guided by an abundance of available data, it is all too easy for brands to focus their investments on customer experience and sales activation but, while data is less prevalent on future buyers, our analysis demonstrates that they are the most important to longer-term brand growth. Marketers need to think about stimulating growth now and for the future, and that means balancing their investment across the buyer lifecycle.