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Spanish brands must switch focus, and do it now

MEANING, DIFFERENCE, SALIENCE

There is an answer to brands’ prayers

Spanish brands must switch focus, and do it now

The fact that this year’s events have exacerbated the challenges faced by Spanish brands is now clear. But the good news is that brands can turn their fortunes around – and there has never been a better time than right now to win new customers and build lasting loyalty.

It will take immense confidence among brand builders to make big, bold decisions regarding how they invest, in order to inspire trust and confidence among the consumers that brands’ very survival relies on. A new cycle of confidence must be set in motion.

Household budgets have in many cases come under unprecedented pressure, forcing people to reassess everything about how they live and the brands they use and buy. Some categories will be dropped altogether out of necessity; in others, people will be looking at their options with a new openness to trying something new.

At the same time, consumers are turning to brands for leadership in these times of fear and uncertainty. They want brands to offer them either comfort or a sense of escape from the world they find themselves in, and they are seeking out brands they can trust.

In uncertain times, brands can provide confidence and reassurance where there is otherwise little. Brands provide a recognizable “guarantee” of quality. They simplify the process of decision-making, and they are an expression of certainty and reliability.

Three magic words: Meaning, Difference and Salience

 

The most valuable brands, not just in Spain but all over the world, are those that stand out from the crowd in a way that makes a positive difference to people’s lives. It’s really that simple, and we call it having Meaningful Difference.

Meaningful Difference doesn’t just get a brand recognized or remembered; it also adds to the bottom line.

The Meaning of a brand can stem from a functional meaning – that is the brand does a good job of fulfilling a need consumers have. That could be a reliable banking service, a safe and comfortable car, or a detergent that cleans their clothes. But to have longevity and lead a category, a brand must also have a layer of emotional meaning, which is what creates lasting affinity between consumer and brand.

Difference is what leads a consumer to interrupt their normal buying habits – to stop, and look at a product that catches their eye in a store or online. Or they pause to consider a brand that, in its communications, promises to do something that others in the category don’t. Given that purchase decisions are increasingly being made in seconds, or fractions of a second, that moment of being noticed can be crucial.

Meaning and Difference in combination create Meaningful Difference.

What the best brands also have in their favor is strong Salience – a way of amplifying Meaning and Difference that acts as a catalyst for growth.

Highly Salient brands are the ones that spring to mind when a consumer thinks of a category or has a need, but people don’t just think of a famous name. They think of a name they believe will deliver Meaning and Difference.

Don’t just take our word for it

Oxford University’s Saïd Business School has studied BrandZ brand valuations and compared them against the real-world ups and downs of business.

They found that BrandZ equity metrics are an excellent predictor of “abnormal” business returns – those not explained by broad economic or category shifts – and that BrandZ measures were able to predict business performance with 99.5 percent accuracy.

What they also found was that difference contributed most to the best business results.

Dangerous imbalance

The interplay between Meaning, Difference and Salience is crucial for brands to appreciate and too often in Spain, brands’ focus is on Salience at the expense of the other two factors.

To some extent, this is understandable. Brands have traditionally looked to metrics like “unprompted recall” as a measure of their success, and fame is a huge help there. But BrandZ data consistently shows that while recognition by consumers is, of course, important for brands, fame alone is not the route to brand value growth or a healthy bottom line.

Without also having Meaningful Difference, brands that working on building strong Salience alone are essentially shouting in the wind: they make a lot of noise but the effect is negligible.

An imbalance between Meaning, Difference and Salience is at the heart of the challenge facing Spanish brands.

They are far more Salient than they are Meaningful or Different, and this “Salience gap” is both the problem and the potential solution to their struggles.

The leading Spanish brands are names that most people have grown up with; they are instantly recognized. In other words, they are hugely Salient. But what are they famous for, beyond simply being there? Today’s consumers aren’t all that sure. Or they know why they’re famous, but they don’t find the reasons relevant to their lives.

If we narrow our focus to compare the brands from the Top 30 that have been hardest hit this year with those that have seen a smaller decline in value, the importance of the Salience gap is even clearer. The stronger performers still have a Salience gap, but it is far bigger among the weaker brands.

The global perspective

What matters to Spanish brands now is not just how they compare to one another but also how they measure up against the international competition. Consumers can, after all, choose almost any brand from anywhere with just a few clicks. Spanish brands’ lack of investment in being Meaningful and Different means they now lag significantly behind many if not most other BrandZ markets and are therefore highly vulnerable.

The Salience gap is far from unique to Spain, though. It is a big problem in the UK, too, where many leading brands have also been trading on their heritage and fame without paying sufficient attention to how they continue to stand out in ways that are important to people.

A Salience gap is something we have also seen among declining brands in the BrandZ Global Top 100 this year. The global brands that increased in value in 2020, despite the pandemic, were more Meaningfully Different than the brands that declined. Similarly, those that lost brand value underperformed on Meaningful Difference but overperformed on Salience.

A better balance between Meaningful Difference and Salience helps brands achieve better ROI on their marketing investment and has a deeper impact on consumer sentiment around a brand.

There are a great many factors that determine the success or failure of a brand, but Meaning, Difference and Salience serve as a powerful barometer of the state of the consumer-brand relationship.

Meaningful Difference in Action

The insurance brand Mapfre is one that consumers see as being different to the rest of the category in ways that make a difference to their lives. It has developed health insurance policies that allow consumers to tailor their coverage to their needs. It promises “Real insurance for real people”, and is active in community projects that promote safety and wellbeing.