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Brand Contribution

Brand Contribution

There are some brands that punch above their weight in BrandZ™ rankings because they score well on a measure we call “Brand Contribution.”

Brand Contribution is a score between one and five that reflects how well a brand differentiates itself from its competitors, generates desire, and cultivates loyalty. The Brand Contribution score a brand receives is the result of extensive consumer research, so it reflects the quantification of current sentiment among consumers towards a brand.

The inclusion of Brand Contribution scores in the formula used to generate brand value is one of the key ways that BrandZ™ rankings are distinguished from other brand valuation methodologies. BrandZ™ is the only ranking that uses online and face-to-face interviews with consumers to quantify the place that brands occupy in people’s hearts and minds.

We can show how brand contribution works by looking at numbers 30 and 31 on the Top 40, Aritzia and Rona. The first is a small apparel brand with a highly differentiated experience and a small but vocal number of fans. The latter is certainly not a laggard when it comes to serving its customers, but as a hardware store that sells functional products, it would be hard pressed to connect with its customers on the intimate level that Aritzia can. As a result, even though it has far greater revenue, the much smaller (by revenue) clothing brand edges it out in brand value.

Brands that score well in terms of Brand Contribution tend to have one of two characteristics: they are either beloved, fast-growing brands or ubiquitous, well-established brands. This is clearly the case here. Lululemon and Aritzia have been on the smaller and faster growing and of the spectrum, though the former has grown so quickly that it has become one of the largest apparel brands in the world.

Lululemon and Aritzia are also highly Different brands. Lululemon stores are not merely places to discover and buy products, they are athletic hubs where the brand establishes deep connections with its customers. Aritzia has tried a different approach, with an emphasis on delivering a curated experience and high quality, high value clothing. Both are in the process of changing how people shop and look at shopping. This dedication to providing an experience that people love tends to translate into major brand value.

Tim Hortons, RBC, and Molson Canadian show a different side to Brand Contribution: prevalence. Many Canadians start the day with Tim Hortons coffee, while a huge number keep their money with RBC. Molson Canadian, of course, is a ubiquitous feature at bars and sporting events in the country. As such, they provide a constant, positive presence in people’s lives.

Brand Contribution fuels resilience and growth

In looking at these five brands, something might seem puzzling: only one improved its brand value year-over-year. This is not surprising as it may seem. Obviously, category has a lot to do with brand value performance this year.

But overall, Brand Contribution does not necessarily point to fast growth. Some brands, like Molson Canadian and Tim Hortons, are such a ubiquitous presence in Canadian lives that it would be difficult for them to grow substantially in value. That said, high Brand Contribution typically provides resilience when compared to other brands in a falling category. RBC, for example, is the best-performing bank in the ranking, while Tim Hortons has shown considerable staying power in an environment that is highly stressed for restaurants.

Ways to Win

Stand out

Lululemon, Aritzia, and Tim Hortons are not only in the top five for Brand Contribution, they also make the top five for the most different of all Canadian top brands. Difference is the largest determiner of whether consumers buy and pay premium prices for a brand. The reason? Different brands offer something that people cannot get from anyone else. As a result, such brands have the opportunity to become more meaningful in their customer’s eyes, meeting their needs and building emotional affinity over time. Staking out a different position and amplifying that through distinctive messaging can position you for growth in the future.

Be there for them

It may not seem much of a strategy, but in a time when supply chains are strained, simply being present for your consumers is sometimes half the battle. And that doesn’t just mean keeping your products on shelves. With people concerned about being in retail environments, you should make purchases as frictionless as possible. While direct-to-consumer plays — much like e-commerce itself — have not caught on in Canada in recent years, they have been providing a terrific customer experience in countries like the US and the UK. And, by cutting out the channel middleman, they are also delivering valuable first-party data that can further help improve the experience.

It’s always wise to advertise

Faced with falling revenues and tighter margins, brands are naturally going to look for places to cut costs, and advertising budgets seem to be a likely target. After all, why reach out to consumers who have so little to spend? Not so fast. While Salience is not necessarily an indicator of long-term brand growth, failing to advertise quickly erodes consumer mind share. “Out of sight out of mind” is not merely a saying, it’s a truism when it comes to brand value. Of course, you can creatively shift your advertising to provide support or meaningful information, rather than selling to an audience that may not be buying. Doing so may enable you to find a place in consumers’ hearts when better times return.

Obsess over every interaction

Two-thirds of all growth come from people who are already predisposed to buy a brand. That’s why many of the world’s top brands stress everything, from the moment a person first encounters a brand to long after the purchase. Today, brands have the ability to analyze every touch point in the customer journey in granular detail. By making each experience count, they can build affinity and create a stronger connection with consumers.

Theory in action

TD Bank

While TD Bank did not make the top 5 for Brand Contribution, it did score a healthy 4. As Canada’s second most valuable brand, it is also number one in the banking category for Brand Experience. The bank has worked hard in recent years to make improvements to the customer experience, especially in digital, with the goal of becoming America’s “most convenient bank.” (TD operates in both the US and Canada.) These efforts include, of course, an app and mobile banking and payment services, but TD is also breaking new ground with initiatives like its chatbot Clari and predictive AI initiatives that include the My TD Project initiative.

The effort seems to be paying off, according to BrandZ™ data. This year TD is the number one bank across a range of experiential metrics including Brand Love, Trust Index, Recommendation Index, Best at What They Do, and Care for Customers. While its brand value fell 14.6 percent in 2020, it is a bank, and all banks did relatively poorly. But with the improvements in the customer experience and an experiential edge over its rivals, TD should benefit in an outsized way in any return to prosperity.