What does it mean for a brand to fail, and how do you know when it happens?
It’s not an overnight process, unless a company like Enron or Wells Fargo does something so egregious that they destroy all trust in their brand overnight. Instead, it usually happens slowly, over a period of time, until one day customers suddenly feel like a stranger to the brand.
The “suddenly” part is almost always an internal perception within the organization. For customers, especially loyal ones, the failing of the brand is a gradual process, sort of like the end of a long romantic relationship when you wake up one morning and realize you no longer know the person lying next to you.
A failed brand manifests itself in many ways. It becomes outdated. It loses relevance in the market. Consumers get confused about or lose faith in what it stands for. When companies feel their brand cachet slipping away, they often copy what successful competitors are doing. But rather than standing out from the crowd, this “me too” approach makes the brand look like everyone else. When consumers can no longer perceive a brand’s unique value proposition, its failure is inevitable.
But We’ve Always Done It This Way…
Brands can fail for many reasons, most of which have to do with failure to keep up with a changing world. A world where new competitors and industry-changing technologies and concepts spring up every day. These five reasons sit at the top of our list.
1. Weak Competitive Analysis.
Most businesses pay attention to their competitors to some degree, but it’s usually in the areas of products, pricing, and promotional messaging. They will compare product features and benefits. They’ll track competitive pricing moves. They’ll look at their competitors’ web sites, social media pages, advertising and marketing collateral. All of which provides much useful data.
The issue is that companies with weak brands often overlook how competitors position themselves in the marketplace. When you don’t take the time to analyze competitors’ positioning, you don’t really know what you’re competing against. Understanding your competitors’ brand strategy doesn’t identify what your brand should be. But it does clarify what it should not be.
2. Rearview Mirror Syndrome.
Like human beings, brands can get stuck in their comfort zones. This typically occurs with companies that have a track record of success. Things have been good for a long time, profits and growth remain healthy, and the brand continues to be well received by the target market. Over time, the organization holds tighter and tighter onto what made them successful. If it ain’t broke, don’t fix it, right? (More on this later.)
When this happens, organizations start making decisions while looking through the rearview mirror rather than at what lies ahead. Management focuses on maintaining the status quo rather than looking at what is changing with customers or competitive business models. They don’t take time to analyze how the organization needs to respond these changes. What was once a vibrant, forward-looking brand soon gets left behind as the business gets stuck in the past.
Look at Kraft Heinz or other consumer packaged goods companies that are struggling against healthy, better-for-you competitors that reflect consumer changes in their diets. And while competitors are inventing ways to deliver more compelling value to customers, brand inactivity leads to the brand becoming out of date in a short period of time.
Complacency often goes hand in hand with the lack of competitor analysis. Only this time it’s not because the company isn’t looking at its competitors, they’re just looking in the wrong places. This typically happens in industries that haven’t undergone major changes in a long time. Competitors look at each other to see how they deliver value to the customers, and everyone is doing pretty much the same thing.
Next thing you know, some upstart, like Uber or Dollar Shave Club, swoops in and totally disrupts the industry with a new way of adding value to the customers. And nobody saw it coming because they weren’t looking in that direction. Netflix destroyed the video rental industry and Blockbuster was late in responding. If you were a video store owner with people still lining up to rent videos on a Saturday night, would you have seen it coming?
4. Failure to Innovate.
Most companies understand the need to innovate in today’s markets, but don’t know how. There’s a common myth that innovation consists of inventing new and better products, which is partly true. At a deeper level, innovation is the process of reinventing new and better ways to deliver value to your customers. This often involves solving problems for customers they can’t articulate or don’t even know they have. Figure that out and you will know what products or services are needed. Steven Jobs excelled at this and turned Apple into one of the most valuable brands in the world. When Apple launched the iPod, they dethroned long-time mobile music king Sony overnight.
Today’s markets change too quickly to wait until someone else disrupts the industry. Playing catchup to the new industry leader is a frustrating and difficult game. Today’s new motto is: if it ain’t broke, break it! Not just catch up to competition, but leapfrog them…
5. Failure to Monitor the Brand.
This may be the #1 reason brands fail. To many, “brand” is an ephemeral concept, hard to define and hard to pin down. So many companies don’t try to measure it. Yet, a brand has metrics that need to be measured and monitored just like sales, profits, operating costs and other key business metrics. Important brand metrics include:
- Brand awareness
- Brand perception
- Consumer confidence and trust in the brand
- Customer loyalty and engagement
- How a brand ranks versus competing brands and why
How do customers relate to your brand? Is it ho-hum or boo-yea!? Do consumers know exactly what your brand stands for and whether you deliver on that promise every time? If you can’t answer these questions, your brand may be in danger of slipping into irrelevance and taking your business with it.
Tell us about your brand challenges and how you address them. If you would like to talk it through with our experienced brand gurus, we’re here to help.