5 charts that show how brand ‘meaningfulness’ drives sales
Brands that are pushing sustainability and a feel-good message to customers now have a real business reason for doing so: It actually drives sales. A new study by the Havas Media Group done in collaboration with GSK and Ipsos found that there was serious money to be made if a brand was seen as trustworthy, or if it was seen as drastically improving a customer’s quality of life.
Havas put those factors, along with others like “this brand makes useful and safe products,” and “this brand makes my life easier” to create a metric called “meaningfulness.” It asked 300,000 respondents how they felt about each of the 1,000 of the world’s biggest brands by market value when it came to attachment and effect on quality of life. Then, it looked inside the brands’ performance on key sales indicators.
The idea was to try to connect a “vision” for a company with measurable attributes — a problem that is plaguing many brands.
“What is interesting year-on-year is that different brands and sectors have shifted in the ways that they matter to us,” said Maria Garrido, global head of data and consumer insights. She pointed to the auto industry, which for years has had a functional relationship with people. Today, the research found, people expect more from their cars — they want them to keep them connected and save them time.
“Meaningfulness” is a key metric not only for the brand world but also for Havas, which uses it as a selling point for its own expertise for clients, so the agency has a vested interest in these results.
Still, while most brands would say that being meaningful to a customer is an important part of their strategy, Havas found that, chances are, those efforts aren’t working. The study found that few brands actually matter — most people just wouldn’t care if 74 percent of the brands in the world around them disappeared — a “disconnection” that is now the new normal. In 2013, the last time the study was conducted, most people said they wouldn’t care if 73 percent of brands disappeared. That number was 71 percent in 2011.
Here’s how that number looks worldwide:
“Brands that enhance the well-being of people, communities and societies are more meaningful,” said Garrido. “In the West, we have a more functional relationship with brands, so continuous innovation and product delivery is key. In high-growth markets, the relationship between people and brands is one that focuses more on personal benefits. In these regions people look to brands to help them achieve economic status, better experiences and everyday inspiration.”
Trust is a major part of the problem. Havas found that about 50 percent of brands are “trusted” globally — but in North America, that number drops to 22 percent.
But when companies are a trusted part of a customer’s life, things start looking up. Havas’ team also crunched a number dubbed “Share of Wallet,” a metric that measured the percentage spent with a brand versus the total annual expenditure within that brand’s category. A brand’s share of wallet was 46 percent higher if the brand scored on drivers of trust and attraction.
A brand’s key performance indicators also did well when it was seen as improving the quality of life and being trustworthy. Havas crunched the numbers for the highest-ranking brands on “meaningfulness” and saw how that affected intent among consumers.
One major caveat: These findings are more germane in certain sectors than others. Havas found that industries like consumer electronics, personal care and food are considered brands that need to score high on trust, ease of use and the likelihood that they improve customers’ lives. Those factors are less important for other, more functional categories, like banking and oil.
But there’s also another major reason to pay more attention to brand perception: Brands that score high on trust and usefulness also outperform the stock market by nearly seven times, the study found.
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