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BRAND HEALTH – THE VITALITY QUOTIENT

BRAND HEALTH – THE VITALITY QUOTIENT

 

DRIVING DYNAMISM

Five ways to energise UK brands​

 

Just as there are many contributors to human wellbeing, there are multiple factors that go towards building a healthy brand.

 

BRANDZ analysis has identified five key attributes shared by healthy, strong and valuable brands that each reflects the extent to which a brand is delivering Meaningful Difference – a vital contributor to Brand Value.

 

Brands that score highly on all five aspects are the most successful: they are “healthy” brands. Those that are low on all five aspects are “frail” and the least successful. Brands with a mix of high and low scores are “OK”.

 

These five key health indicators can be combined into a single score we call a brand’s Vitality Quotient, or its vQ. The average score of all brands is a vQ of 100. Those with a score over 110 – making them at least 10 percent above average – are those we say are healthy overall. A vQ score of 95 or under means it’s time to call 999.

 

Nurturing brand health makes good business sense. A strong vQ score means a brand is meaningfully different, and this can drive growth in brand value. In fact, globally, brands with a vQ score of 110 or more have a brand value almost 70 percent higher than brands with a low vQ score. Some of the best-known and most valuable brands are those with high vQ scores: names like Google and Ikea.

 

The five key health indicators underpinning healthy brands and contributing to vQ are:

  1. BRAND PURPOSE​ : There’s a strong sense of brand purpose, so the brand makes people’s lives better
  2. INNOVATIONBrands must be innovative, which means they’re seen as leading the way in their sector and shaking things up.
  3. COMMUNICATIONThey must also have strong communications, with creative powerful and memorable advertising.
  4. BRAND EXPERIENCE: They provide a great brand experience that meets consumers’ needs, and is available when and where consumers need it
  5. LOVE: Over time, consumers come to love the brand, and that helps sustain the brand until the next innovation.

 

Stronger brands are, on average, worth more
Brands can look at how they perform on the five individual health indicators when they are seeking clues to improving their overall brand health. When one or more of the indicators is flagging, overall brand health can suffer.

 

 

 

 

 

 

Time to get a check-up

 

There is clearly room for the majority of brands in the UK Top 50 to improve their health.

 

Among brands in the UK Top 50, the average vQ score is only 105, which makes them only 5 percent healthier than the average of all UK brands. While these scores underline the relative health of the Top 50 compared to the rest, it is not the glowing picture of health we would hope to see in the country’s most valuable brands.

 

Only 22 percent of the Top 50 Most Valuable Brands are classed as healthy, and the vast majority are in “OK” territory. Among a broader pool of more than 1,700 UK brands researched by BrandZ, only 6 percent performed well across all five health indicators and had a vQ score that put them in the healthy zone. Most worryingly, 29 percent of all UK brands failed their brand medical and are classed as being frail. This makes them highly vulnerable to being undermined by disruptor brands.

 

To some extent, this malaise is affecting brands across western Europe; BrandZ™ research shows similarly lacklustre brand health in France and Spain. But this should provide little reassurance to UK brands, at a time when the most valuable global brands are simply bursting with good health.

 

 

 

 

What’s the prognosis?

 

The healthiest brands in the Top 50 Most Valuable UK Brands are those that score well on all five of the key health indicators: purpose, innovation, communications, experience and love. They generate a Vitality Quotient far higher than the 100 average.

 

A high vQ score benefits a brand in several ways. Brands with a high vQ have more than double the Brand Power, which is an indicator of their ability to drive sales. They are better positioned to be able to justify a premium or to feel “worth it” to consumers.

 

Brands with a high vQ are more strongly positioned for future value growth.

 

Peak performance: the healthiest brands in the UK Top 50 2017

 

 

The majority of UK brands do not enjoy the same level of health as those above. And the threat to less robust brands does not just come from global rivals; there is also strong competition on the home front. Only half of the healthiest brands in the UK make the Top 50 for 2017. Brands that are high performers on the BrandZ™ health measures - but that don’t make the Top 50 because they are not big enough or are not listed companies – include the National Lottery, Premier Inn hotels, and the price comparison site Compare the Market.

 

The healthiest foreign brands in the UK are led by Pampers, Microsoft, iPhone, Apple and Amazon. Brand health does not come about by accident, nor is it determined by the category in which a brand operates. It is the result of a concerted focus on investing in the factors that contribute to better brand health, and being meaningfully different in the eyes of consumers.

 

THE ROUTE TO BETTER VITALITY

 

1 Purpose

 

Brand purpose is what a brand sets out to achieve, beyond making money. It is the way a brand makes people’s lives better – not just the practical, literal things that a product or service does for someone. Having a strong sense of purpose is increasingly important as consumers seek brands that don’t simply do a good job at a fair price, but also do something positive for the community or the environment. Brands with purpose make consumers feel good.

 

Over 12 years, the brands in the Global Top 100 with high scores for purpose have grown in value by 175 percent, while those with the lowest have grown by just 70 percent.

Brands outside Top 50 ranking that have a strong sense of purpose include the National Lottery, Innocent and Holland & Barrett.

 

Purpose in action - BBC

 

The BBC has a clear, and clearly stated, mission to develop programming and services that inform, educate and entertain. Its news services strive to be independent and impartial, and it is known for developing high-quality documentary and drama content. The brand is widely regarded a national treasure and as such is highly scrutinised, which means it comes in for frequent criticism, most recently over the high salaries paid to some of its staff. But the brand’s purpose is always the benchmark for performance.

 

 

2 Innovation

 

Innovation is not just the preserve of technology brands. Any brand that is seen as doing something new, or setting trends for their category, will get talked about and tried. When trial goes well, that can lead to a longer-term relationship and, ultimately love, which correlates strongly with innovation. Innovation can mean developing a product that does something different, providing an innovative service, or expanding into a new category. Crucially, any innovation by a brand needs to be recognised as such by consumers, otherwise it doesn’t count as innovation. Innovation creates a strong predisposition for sales, and the brands that have high innovation scores in the Global Top 100 have risen in value by 276 percent in 12 years, compared to just 15 percent growth for the slowest innovators.

 

 

 

 

Brands outside Top 50 ranking that have are seen by consumers as highly innovative include personal care retailer Lush and the boutique home decorating brand Farrow & Ball.

 

Innovation in action – Virgin Media

Virgin Media is a fairly new entrant to the entertainment and telecommunications infrastructure sector and is investing in improving the broadband network to improve people’s ability to enjoy their favourite content. The brand is also an innovator in the way it relates to consumers. Its advertising frequently uses humour to indirectly highlight the benefits of its services, with celebrities such as Mo Farah and Usain Bolt.

 

 

3 Communication

 

Strong communication has two key elements to it, and neither one alone will be effective. At its most basic level, brands need to be doing sufficient advertising in the right places to be visible and recognisable to the people they’re trying to reach. But being vocal and announcing a brand’s presence is not enough on its own; brands also need something genuinely engaging to shout about. Brands therefore need to do great things, and then tell people they’re doing them. One without the other means wasted resources, but strong communication and share of voice put a brand at a clear advantage. Brands from the Global Top 100 that have high communications scores have surged in brand value 191 percent over 12 years, while those that perform poorly on this measure have only grown by 55 percent.

 

Brands outside Top 50 ranking that have a strong communications include the insurer Churchill, and price evaluation site Go Compare.

 

Communication in action – M&S

M&S has united its food and department store units under a single advertising message that resonates with consumers’ growing desire to spend on experiences that make them feel good. The “Spend it well” campaign is a message for our times.

 

4 Experience

A brand not only has to deliver a great experience at every point of interaction, and help consumers at every step, it also has to remind consumers, through effective communications, that it is focused on doing this well. Experience starts long before a person considers buying a product, and lasts well beyond the moment of purchase and even the moment of consumption. It includes every exposure to an ad, every experience on a brand’s web site, and every minute they spend waiting for help at a counter or on the phone. Providing a great brand experience cements the relationship between consumers and brands. Those brands in the Global Top 100 that deliver the strongest experiences have grown in brand value by 188 percent in 12 years. Those brands with low experience scores have only increased their value by 18 percent in that time.

 

 



Brands outside Top 50 ranking that perform well on brand experience include 
B&Q, Lush and the National Lottery.

 

 

Experience in action - Boots

The combination of a wide retail network, trusted pharmacies, international brands and its highly regarded own-brand ranges have helped Boots become a destination for everything health and beauty-related. The loyalty scheme, Advantage Card, gives customers personalised offers tailored to their shopping habits.

 

 

5 Love

Some of the most loved brands in the world are also the most innovative – brands like Nike and Apple, for instance. Love in this context is the emotional affinity of a brand, and it’s something that can’t be bought or manufactured. However, the conditions in which love can flourish can be created. If brands take the time and care to invest in promoting a higher purpose, innovating, and delivering a consistently great experience, then love tends to happen naturally. In the times between innovation, love is often what sustains the consumer relationship with a brand.

Among the most-loved brands in the BrandZ™ Global Top 100, brand value has risen an average of 191 percent over 12 years, while those with poor love scores are up just 32 percent.



Love in action - Cadbury
This is a brand that UK consumers have grown up with, and most people have a favourite from the extensive Cadbury range. The depth of feeling people feel for Cadbury has been evident during times of change, such as when Kraft (now Mondelez) bought the brand, and when the recipe for Crème Egg was adjusted. To consumers, this wasn’t just about chocolate, it was their chocolate.