Why your brand and your reputation is important
#BetterDirectors #WebinarWednesdays #BB@9 Calculating Brand Strength and Brand Value
Strong 1 Brand 2 brand 3 4 Investment
Brand Equity
Brand Performance Weak brand
Brand Strength Index Brand Impact Forecast Revenues Brand Valuation (BSI) (Royalty Rate) Implication: Maintain and improve brand Maximise the impact of brand Use your brand to help build Identify value created, value attributes relative to strength within the core revenue growth, and potential and value at risk from competitors. business, and where it understand where brand drives changes to brand strategy. influences most. income. Industry ISO 20671 : 2019 ISO 10668 : 2010 ISO 10668 : 2010 ISO 10668 : 2010 Standard:
#BetterDirectors #WebinarWednesdays #BB@9 Brand Strength Index
Effective BSI Source Description Weighting Attributes
Widely recognised factors deployed by Marketers to create brand loyalty and Brand X% Product (e.g. CAPEX) market share. We therefore benchmark brands against relevant input Investment X% Place (e.g. SEO) measures by sector against each of these factors. X% Inputs Price (Value for Money) X% Promotion (Marketing Spend) 25% X%
Familiarity X% Customer Consideration / Familiarity X% X% Preference / Consideration X% (or internal data) Recommendation Brand X% Equity Staff
X% X% Employee Score Brand equity accounts for 50% to reflect the importance of stakeholder 50% Financial perceptions to behaviour X% Credit Rating X% X% Analyst Recommendation External Environment Score X% Brand Equity is important to all stakeholder groups with customers being Community Score X% X% the most important x% Governance Score Reputation Brand Strength Index Strength Brand Brand X% Outputs Performance X% Loyalty X% Current Revenue 25% X% X% Current Margin Quantitative market, market share and financial measures resulting from the strength of the brand. X% Forecast Revenue growth X% Forecast Margin #BetterDirectors #WebinarWednesdays #BB@9 Why is Brand and Reputation Important?
#BetterDirectors #WebinarWednesdays #BB@9 The Business Impact of Brand Reputation
CUSTOMER CHOICE
Brand REDUCE PROFITABILITY & REGULATORY VALUE GROWTH Reputation COSTS
LOWER FINANCE EMPLOYEE AND OTHER #BetterDirectors ATTRACTIVENESS #WebinarWednesdays COSTS #BB@9 Brand reputation impacts customers in a variety of ways
Strong Brand Reputation lead to: - Higher Consideration CustomerChoice - Higher Penetration - Higher Frequency - Higher Prices - Higher Loyalty - More effective Advertising
#BetterDirectors #WebinarWednesdays #BB@9 In fact, a relative 1pt (/10) increase in brand reputation can lead to an increase in consideration of 12.7%
Strong Brand Reputation lead to:
- Higher Consideration 100.00% - Higher Penetration 90.00% 80.00%+12.7% CustomerChoice- Higher Frequency 70.00% 60.00% - Higher Prices 50.00% 40.00%
- Higher Loyalty 30.00% - More effective Advertising 20.00% 10.00%
Consideration / Awareness Consideration / 0.00% 4.00 5.00 6.00 7.00+1pt8.00 9.00 10.00 Reputation
#BetterDirectors #WebinarWednesdays #BB@9 AAA brands can borrow money at an average of 2.5% less than A- brands
4.50% 4.00% 3.50% 2.5% 3.00% 2.50% LOWER FINANCE Average 2.00% AND OTHER Interest 1.50% Premium COSTS 1.00% 0.50%
0.00%
AAA+ AAA AAA- AA+ AA AA- A+ A A-
Brand Strength
#BetterDirectors #WebinarWednesdays #BB@9 AAA brands can borrow money at an average of 2.5% less than A- brands
95
90 EMPLOYEE ATTRACTIVENESS 85 Brand Strength 80
75
70 - 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 Total Annual CEO Pay inc Bonuses (USD m) #BetterDirectors #WebinarWednesdays #BB@9 South Africa top 10 Most Valuable Brands
#BetterDirectors #WebinarWednesdays #BB@9 Top 10 Most Valuable Brands as at 1st Jan 2020
2020 Brand 2019 Brand 2020 Brand 2019 Brand 2020 Rank 2019 Rank Brand Industry BV Change Valuation Value Rating Rating 1 1 MTN Telecoms 49,401 -1.7% 50,280 AAA AAA- 2 2 Vodacom Telecoms 30,273 -9.0% 33,281 AAA AAA 3 3 First National Bank Banks 23,851 -6.5% 25,515 AAA AAA 4 4 ABSA Banks 22,716 -3.2% 23,474 AA AA+ 5 8 Old Mutual Insurance 20,285 15.4% 17,571 AAA- AA+ 6 5 Standard Bank Banks 19,941 -11.5% 22,539 AA AA+ 7 6 Sasol Oil & Gas 18,400 -12.2% 20,956 AAA- AAA- 8 11 Nedbank Banks 16,513 4.4% 15,817 AA+ AA+ 9 12 Investec Banks 15,830 2.3% 15,468 AA- AA- 10 10 Woolworths SA Apparel 15,039 -6.1% 16,020 AA+ AA+
#BetterDirectors #WebinarWednesdays #BB@9 South Africa’s Strongest and Most Reputable Brands
Reputation 9.00
8.00
7.00
6.00
5.00
4.00
3.00
2.00
1.00
0.00
#BetterDirectors #WebinarWednesdays #BB@9 Impact of Covid-19 on Brands
“The farther back you can look, the farther forward you are likely to see.” -Winston Churchill
#BetterDirectors #WebinarWednesdays #BB@9 Lessons from previous recessions
#BetterDirectors #WebinarWednesdays #BB@9 Why investing in your brand is important
#BetterDirectors #WebinarWednesdays #BB@9 COVID-19 Impact Analysis (Global)
50% 42% 42% 44% 35% 40% 32% 27% 30% 29% 24% 30% 22% 20% 20% 17% 20% 19% 18% 17% 19% 14% 16% 16% 15% 15% 20% 11% 13% 12% 6% 6% 7% 10% 2% 0% -10% -7% -8% -11% -20% -11% -12% -12% -14% -14% -15% -16% -16% -17% -17% -19% -19% -19% -20% -20% -30% -22% -24% -26% -26% -26% -27% -28% -28% -29% -30% -40% -32% -37% -50%
Jan - Mar Mar - July
#BetterDirectors #WebinarWednesdays #BB@9 COVID-19 Impact Analysis (South Africa)
200% 161% 150% 76% 89% 100% 63% 51% 31% 33% 33% 26% 26% 50% 8% 5% 15% -2% -14% -11% 0% -36% -50% -23% -27% -30% -33% -34% -36% -36% -45% -47% -49% -100% -69% -75% -89% -150% -111% -111% -137% -200% -250% -222%
Jan to March March to July
#BetterDirectors #WebinarWednesdays #BB@9 COVID-19 Impact Analysis (Global)
25% 21% 20% 16% 15% 7% 10% 6% 5% 3% 3% 0% 0% -5% -1% -1% -1% -3% -3% -5% -5% -4% -10% -6% -7% -9% -8% -9% -15% -13% -13% -15% -14% -20% -17% -19% -19% -20% -21% -25% -23% -30%
#BetterDirectors #WebinarWednesdays #BB@9 Growing your brand post COVID-19
#BetterDirectors #WebinarWednesdays #BB@9 Should marketing budgets and activity be curtailed?
1. Firstly, the cost of media usually decreases in recessions. 2. Secondly, consumers are more receptive and have more time to absorb brand messages. 3. Thirdly, if the messaging is appropriate it can have a more powerful emotional effect.
#BetterDirectors #WebinarWednesdays #BB@9 Should marketing budgets and activity be curtailed?
1. A McGraw- Hill research study which assessed 600 companies in an economic downturn found that business that maintained or increased marketing expenditure increased base revenue significantly once the economy had recovered. 2. Peter Field (2008) analysed 880 companies from the IPA database and showed that brands that increase their Share Of Voice (during recessions and boom periods) are more likely to increase their market share. The short-term benefits of reducing budgets in a recession were offset by the drop in long-term profitability (which was most acute after the third year of reduction).
A.G. Lafley, ex CEO of Procter & Gamble, used to say that at P&G they had “a philosophy and a strategy: when times are tough, we build market share.”
P&G have committed to continue investing in communications to retain the “mental availability” of its brands Rationalizing brand portfolio to focus budget on smaller group of stronger brands
#BetterDirectors #WebinarWednesdays #BB@9 Which brand attributes should you be investing
in? Easy to deal with Genuinely offer something different Care more about profits than their “In 65% of cases, consideration forms the closest link to base revenue, where growth in customers consideration causes growth in the revenue.” Innovative Excellent website & apps Great customer service A step ahead of the competition Expensive/overpriced Care about the wider community Therefore, the logical question is what drives consumer consideration? Popular with my friends Great value for money Transparent in their dealings Good range of products to choose from I don't trust them None of these
#BetterDirectors #WebinarWednesdays #BB@9 Which image attributes are most important to Consumers? Effect on consideration Easy to deal with Easy to deal with Genuinely offer something Great customer service different Care about the wider community Care more about profits than Consumer champions their customers Popular with my friends 0.8 Innovative Great value for money Excellent website & apps Transparent in their dealings Great customer service Genuinely offer something A step ahead of the different competition Innovative Innovation Expensive/overpriced 0.3 Care about the wider A step ahead of the competition community Care more about profits than Popular with my friends their customers Great value for money Expensive/overpriced Profit hungry 0.03 Transparent in their dealings I don't trust them Good range of products to choose from Excellent website & apps Digitalisation and 0.56 I don't trust them Good range of products to Product range None of these choose from
#BetterDirectors #WebinarWednesdays #BB@9 Consumer Champions Capitec is the South African consumer champion in the banking industry
90%
Capitec Bank First National Bank 80%
70% NedbankTymeBank
Standard Bank 60% ABSA Wesbank Discovery 50% Bank Zero Investec Rand Merchant Bank Consideration Conversion African Bank Standard Chartered 40%
Sasfin Bank 30% -2.000 -1.500 -1.000 -0.500 0.000 0.500 1.000 1.500 2.000 2.500 3.000
Consumer Champion Performance
#BetterDirectors #WebinarWednesdays #BB@9 Digitalisation and Product Range FNB is highly considered due to its digital capability as well as its wide product range
90% Capitec Bank First National Bank
80%
70% TymeBank Nedbank
ABSA Standard Bank 60% Wesbank Discovery Bank Zero Investec Citi/Citibank 50% Rand Merchant Bank
Consideration conversion Standard Chartered
40% African Bank
30% -3.000 -2.000 -1.000 0.000 1.000 2.000 3.000 4.000 Digitalisation and Product range performance
#BetterDirectors #WebinarWednesdays #BB@9 Soft Power
#BetterDirectors #WebinarWednesdays #BB@9 Brand Finance Global Soft Power Index 2020
Brand Finance continues to grow its existing understanding and knowledge with regards to nation branding and soft power through key events such as the Global Soft Power Summit 2020 in London & Oxford on 25th-26th February 2020.
The world is at a crossroads where power dynamics are shifting permanently. Soft power is now the driving force behind reputation and influence on the global stage. If nations do not act now to enhance and leverage their soft power, they will be left in the wake of their neighbours and counterparts.
Report Link: https://brandirectory.com/globalsof tpower/
#BetterDirectors #WebinarWednesdays #BB@9 What is Soft Power?
Brand Finance defines Soft Power as “a nation’s ability to influence the preferences and behaviours of various actors in the international arena (states, corporations, communities, publics etc.) through attraction or persuasion rather than coercion.”
Why is it important and relevant? Brands can leverage the strong attributes of their nations soft power to differentiate themselves in an increasingly competitive global market.
#BetterDirectors #WebinarWednesdays #BB@9 Soft Power Methodology
Sample: 54,000 General Public / 1,000 Specialist Audiences Weighting: 75% - 25% Countries: 100 surveyed - 60 ranked
Media & Business & International Culture & Education & People Governance Communicati Trade Relations Heritage Science & Values on
Easy to do Influential in Influential in Respected Good A leader in business in diplomatic arts and Generous leaders communicators science and with circles entertainment A strong and Politically Helpful to other Strong Familiarity Reputation Influence Food the world Affairs I follow stable stable & well- countries in educational Fun loves closely economy governed need system Products and High ethical Acts to protect A great place to Influential Leading-edge brands the standards and the Friendly people visit media technology world loves low corruption environment Good relations Trustworthy Safe & secure with other Rich heritage Trustworthy media countries Respects law An appealing and human Tolerant lifestyle rights Leaders in sports #BetterDirectors #WebinarWednesdays #BB@9 Top Soft Power Players
Economic Top 5 by GDP (USD trillion)
21.44
14.14
5.15 3.86 2.94
#BetterDirectors #WebinarWednesdays #BB@9 Top Soft Power Players
South Africa is ranked 36th out of 60 nations research.
Key attributes for South Africa are Familiarity, Influence and International Relations.
However, South Africa is Ranked 37th in governance, recording a particularly low score for ethical standards and corruption (53rd).
Is there an opportunity for South Africa brands to leverage the inherent strengths of their origin to help support their brand and business?
#BetterDirectors #WebinarWednesdays #BB@9 Top Soft Power Players Reputation Switzerland Japan Germany Norway Sweden Canada UK Denmark Australia Finland USA NetherlandsSpain France Italy Ireland Singapore Estonia UAE China Czech Republic South Korea Russia Brazil India Israel Saudi Arabia South Africa Nigeria Myanmar Pakistan Iran Iraq
Influence (General Public) #BetterDirectors #WebinarWednesdays #BB@9 Q&A Session
#BetterDirectors #WebinarWednesdays #BB@9 Q&A Session
#BetterDirectors #WebinarWednesdays #BB@9 Thank you for joining us for today's webinar.
Contact Jeremy Sampson via LinkedIn Contact Declan Ahern via LinkedIn
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#BetterDirectors #WebinarWednesdays #BB@9