Who cut the budget?

One phenomenon is that nowadays, clients are increasingly reluctant to spend money on branding, especially pure branding (the kind without any effects).

The epidemic is one reason, and survival is a problem. Why spend money on something that will not bring any short-term benefits?

The fact is, even without the epidemic, the issue of whether or not to build a brand has been greatly challenged by many company decision-makers. Even large companies such as McDonald's and Unilever are considering whether the position of CMO is necessary.

This matter concerns the vital interests and development direction of many people in the entire industry chain. After all, most of the brand budget is given to advertising companies.

Faced with a complex media environment and an endless stream of marketing concepts and tools, we are confused as to “Who cut the brand budget?” and “Who killed Adman?”

Sometimes we can't find the answer, often because we didn't ask the right question.

This article attempts to go back to the starting point and start thinking: What is a brand? What is the value of branding?

Fundamentally speaking, building a brand is not the purpose of a business. The reason why we are willing to invest money in this abstract word is that we believe it can help the business create profits, and create profits continuously and more efficiently, because consumers recognize it.

So for enterprises, brand is a means; for consumers, brand is a result.

So how does a brand create profits for a company?

Let’s look at how the result of “brand” helps companies create profits from the consumer’s perspective.

Two major profit values ​​of brands

The first value is to reduce customer acquisition costs. Reducing customer acquisition costs is based on the reduction of consumer decision-making costs. For two products in the same category, the one with stronger brand power will have more choices. Consumers believe that a good brand represents stable and reliable quality assurance, a stronger sense of identity, lower risks, and that even if something goes wrong, they can find the person responsible.

Better brands mean faster decision-making and more choices for consumers.

The second value is to create brand premium. The same pair of shoes may be sold for 200 yuan by ordinary brands but 800 yuan by Nike. This is the premium brought by the brand image and is also the most ardent desire of many business owners when they initially want to build a brand. The most typical example is luxury brands. In the minds of consumers, what they buy is not just a bag or a watch, but more of a symbol of identity that the brand image brings to themselves.

Let me insert a question here: Do all brands have room for premium? No. Whether a brand has a premium depends on two aspects:

The first is business strategy. If the business adopts a low-price strategy, then the brand will not intend to make money from brand premium from the beginning, but will focus on obtaining the first value of the brand: reducing customer acquisition costs, that is, winning more customers and occupying market share, such as Xiaomi’s initial cost-effective strategy.

The second determining factor is the category, or more precisely, whether consumers are willing to spend more money on this category beyond the rational value of the product. For example, for a credit product, will consumers be willing to pay a higher interest price just because it is a big brand? No.

Therefore, before formulating a strategy, companies need to clearly understand the premium space for their products and allocate the proportion of investment in delivering rational value and emotional value to consumers.

If you use the logic of premium to build a brand that has no room for premium, then the brand strategy is wrong from the beginning. This also explains why Xiaomi went from rarely advertising in the beginning to becoming one of China's major advertising sponsors. Because the business strategy changed, the purpose of Xiaomi's brand building also changed. It needed to reshape its image through advertising, change consumers' original perception of low prices, and expand its smart home product category.

How have we done it over the years?

The second question is, since consumers recognize the brand, how do we establish it in the minds of consumers?

Just like the interactions between people, from seeing the other person's appearance and knowing his name (acquaintance), to understanding what the other person does, what interests or specialties he has (cognition), and then to resonating with the other person's outlook on life and values ​​(identification), this is also the progressive process of the relationship between the brand and the user: recognition-cognition-identification.

Therefore, there are three levels of systematic brand building: enhancing brand recognition (awareness), rational value transmission (cognition), and emotional value transmission (identification) .

In the past, each level has been taken to its extreme, forming a set of theories that work well for specific categories under specific circumstances.

For example, the brand identification system is essentially to reduce consumers' decision-making costs through scientific brand naming and logos. H&H developed it into "Super Symbols Are Super Creativity". I personally believe that compared with Internet brands, this methodology is more suitable for popular brands that have many stores or focus on product packaging.

Rational value transfer , with USP creative theory (unique selling proposition) in the front and Troutelis’ category positioning in the back, attempts to occupy the minds of consumers in the red ocean of competition and carve out a path through overwhelming advertising saturation attacks. But this operation method has a big prerequisite: having money.

In the transmission of emotional value , brands pay more attention to the emotional experience of consumers. As Mr. Ogilvy said: "Consumers buy not only products, but also psychological satisfaction. Advertising should give emotions to brands." This is an important school of thought in advertising creative strategy theory - brand image theory (based on vision, emphasizing the brand's emotions, personality, and values, and using advertising as the main marketing method). What it brings to users is image and identity recognition.

4A advertising companies represented by Ogilvy have existed in China for more than 20 years, and once brought prosperity to the advertising industry. The rapid development of mobile Internet in recent years has also created many excellent local creative hot shops and created many vivid communication cases.

However, if we reflect on these years, whether it is the targeted advertising that attempts to occupy the minds of users, the brand image films that want to make people cry, or the social blockbusters that would rather sacrifice brand relevance in order to compete for the attention of mobile phone screens, how many actions have truly left assets for the brand, and how many are just short-lived? Is it a work created by Party A and Party B based on brand strategy to solve problems, or is it the crystallization of anxiety and a bubble in traffic?

When we see others’ success, we also try to take shortcuts, only to find that there are no shortcuts. Are the old routines still useful? Maybe, but there are more challenges ahead.

What has quietly changed in this era?

1. Changes in consumer behavior:

In the days when commodities were relatively scarce and the Internet had not yet appeared, the customer's behavioral path from awareness to purchase was very long.

The original consumer behavior model was AIDMA (Attention - Interest - Desire - Memory - Action). The communication method was one-way and linear. Consumers did not have many other channels to refer to except receiving information conveyed by the company. This process is mainly driven by traditional advertising, promotional activities and other means, while broadcast advertising, which focuses on rational value delivery, is the core driver of AIDMA.

In the initial stage of the Internet, a new behavioral pattern AISAS (Attention - Interest - Search - Action - Share) emerged, so there was SEO&SEM for search, but the attention and interest stages were still achieved through advertising marketing, continuous exposure in mainstream media, or a wave of integrated marketing online and offline, and the responsibilities of the brand department mainly lie here.

In today's mobile Internet environment, has the consumer behavior path become more complicated or simpler? Think back to your last few shopping experiences.

If you want to have afternoon tea, open the food delivery app and try the latest drinks with high ratings. If you like them, ask your colleagues to buy them together next time. If the season changes and you want to buy some clothes, open Taobao and browse around, and place an order if you see something you like.

However, nowadays, more often than not, you see an information flow advertisement, a WeChat article, a Xiaohongshu video, or a live broadcast, and you happen to see a product/content that interests you. You click on it, and if you think it’s good, you either download the APP to try it out, or directly purchase the product.

From people looking for goods to goods looking for people, the process is: see → click → become interested → experience/purchase → repurchase

The process from awareness to purchase may only take 10 seconds to complete, which exponentially shortens the distance between the product and the consumer, allowing them to buy the product as soon as they are attracted. This directly led to the transfer of functions of influencing consumers' "cognition" and "interest", which were originally undertaken by the brand department, to the performance advertising side. When users began to experience the product, the brand-user interactive journey truly began and determined the success or failure of the marketing.

There is no doubt that with the advent of the 5G era and technological changes, the consumer behavior path will only become shorter and shorter. What we need to think about is where will become the next more important territory for building trust with consumers.

2. Changes in consumer decision-making psychology:

The biggest change is: no longer focusing on “big brands”.

Do consumers today trust brands? I think they do believe it, but the brands in the minds of the younger generation are no longer the big brands that rely on mainstream media advertising to rise, but the brands that they themselves have personally experienced the beauty and power of. They may not be very well-known or perfect, but their expressions are sincere enough and the experience is friendly enough. To put it simply, what we believe in is "real beauty."

Media equality and information transparency have given this generation of consumers the possibility to be rational, and the emergence of the epidemic has made consumers more pragmatic. Those big brands that are bluffing, hypocritical and try to charge a premium will sooner or later overdraw the trust of consumers in the vortex of negative public opinion after repeated experiences and become vulnerable.

To sum up, the impact of consumer behavior and psychology on brands and advertising practitioners is:

1. Some tasks (cognition-interest) in traditional brand building have been replaced by Internet shopping platforms to varying degrees, and advertising aimed at spreading exposure and building awareness will gradually decrease;

2. The false bubble in brand premium has been gradually burst by the Internet, and the driving force of traditional advertising has been greatly reduced.

What will be the new brand power?

What’s important is that we can see what is constant and what is changing, and embrace it.

Brand power will still influence consumers' decisions, but we need to redefine "brand power" in the minds of consumers.

From focusing on communication to focusing on operations, relying on communication and exposure is far from enough to build a high brand wall.

Consumers are reconstructing the excellent brands in their minds in a new round of consumption experience.

Brand building today requires going deeper into customers, finding important brand contact points, and centered all actions around “building better brand relationships.”

Regarding brand relationships , I would like to talk about my reflections and some directional suggestions. Brothers are welcome to discuss together.

1. Optimize functions and iterate brand personnel’s capabilities

During the past few years at Party A, my biggest feeling is that the brand department and the product operations department have more and more intersections, and some of their functions can even replace each other. For example, new media operations, SEO operations, and IP operations are placed in the product operations department of some companies, while others are placed under the brand (marketing) department. Now, brand colleagues have also begun to devote themselves to user operations and event operations that are mainly based on private domains.

Now think about it, this strange phenomenon can be called a "product of the times". Product operation emerged in the context of the development of the Internet. Its purpose is to help better establish relationships between products and users, promote transaction conversions or increase dwelling time. As for the brand department, it was born in the industrial age. Products and brands are separated, one is responsible for production, and the other is responsible for packaging and external communication. The generation of purchasing behavior mainly depends on how well the brand communicates externally.

As mentioned earlier, in the Internet age, consumer behavior habits have changed, and the way brand relationships are established has also changed. Although product operations and external communications both affect brand relationships to varying degrees, today we have to pay more attention to product operations.

Perhaps some of the functions of these two departments can be merged. In fact, many well-known startups are already doing so. But before that, it is time for brand people to broaden their boundaries and learn from senior operators in terms of thinking and skills. After all, not all problems can be solved by advertising, endorsements, and cross-border cooperation.

2. Unify internal and external aspects and attach importance to internal branding

A company’s mission, vision and values ​​are the soil for brand relationships.

When all employees of a company realize that their job is to create, serve and better satisfy customers, the company can establish a long-term brand relationship with customers. This also shows the necessity of elevating the brand management department to a strategic position, rather than just a department that gives makeup to the company or products.

Starbucks is a good example of internal branding. It does not rely on traditional advertising methods, but through two important ways:

First, product orientation . The core concept of Starbucks’ brand value is “customer experience”. It hardly does much advertising, but invests more in service experience.

The second is to formulate an internal brand charter . When Starbucks was first founded and was still a small brand in Seattle, management and employees jointly drafted a mission statement, condensing the company's mission into a program, which served as a guide for the company's decision-making and a norm for action. It was then handed over to the "Mission Assessment Team" to oversee and implement it, and to build brand loyalty through publicity from the inside out.

Starbucks' mission statement (later updated around 2007):

He built Starbucks into a global leader in premium coffee, while always adhering to consistent principles as the company continued to grow.

Guiding principles:

Provide a perfect working environment and create a working atmosphere of mutual respect and trust;

Upholding diversity is an important principle in our business operations;

Using the highest standards for sourcing and roasting, and providing the freshest coffee;

Can meet customers' needs with great enthusiasm;

Actively contribute to the community and the environment;

Recognize that profitability is fundamental to our future success.

Only by internalizing the brand from a strategic perspective can employees be motivated to create breakthroughs, give birth to "great" ideas, continuously optimize product and service experiences, condense deeply rooted values, resonate with consumers, and allow brand relationships to enter a virtuous circle.

The most inspiring ads are those that are created for the corporate context. Apple’s “Think Different” in 1997 and Bilibili’s “The Next Wave” in 2020. The reason is not how well the story script is written, but the consistency between the inside and the outside .

Finally, to summarize my understanding of excellent brand qualities, I believe that excellent brand people must have two kinds of thinking. One is to be able to look at the big picture, use strategic thinking to take a comprehensive view of the situation, pick out the key points, and formulate operational guidelines; the other is to be able to start small, use operational thinking to always be customer-centric, and implement plans. (In my opinion, operational thinking is a kind of value. Only those who care about customers can truly reach people's hearts.)

In the future, the sense of accomplishment of brand people may not be determined by how much money they spend or how many communication campaigns they have carried out, but rather by whether they have deeply influenced internal employees to act together, whether they have established good relationships with customers at every contact point, and whether the "good life" conveyed to users does not only exist in public relations releases.

Author: Lemon

Source: Lemon?