Nike, Apple, Google, Amazon, and Coca-Cola are oft-cited examples of brands that broke the rules and reached stardom. But the history of brands is filled with more failures than successes.
We tend to study and follow only a few successful brands that survived and reached the glory ignoring the rest - the outcome of a cognitive shortcut identified as survivorship bias.
So, let us see a different approach and recognize the reasons behind brand failures.
Based on the research I have done in the last 7 years; I had found 9 common indicators behind the downfall of brands.
1. Brand Promise communicated at the Front end, not Delivered
Companies tend to invest more money on advertising and other acquisition efforts and fail to develop the back-end capabilities to deliver their promise.
2. Creative Strategy going before Brand Strategy
Brand strategy and creative strategy are interlinked but both are different. The brand strategy identifies the gap in the market, studies the cultural nuances, and looks for meaningful insights. Whereas, creative strategy is the means to execute the brand strategy.
Most executives don’t travel beyond the creative strategy, which results in the lack of competitive edge.
3. Brand strategy and product strategy travel in different tracks.
Your product is the brand. Your brand is the product. Most companies miss this critical alignment.
4. Lack of relevance
Try to please the broad market than being meaningful to a few. A 1000 true fans are far better than 1, 00,000 ordinary following. Most of us fall prey to the number game.
5. Just another sheep in the flock without any differentiation
Sameness is the chief enemy of brands. Differentiate or die, exclaims Jack Trout – a legendary Marketing Guru.
6. Venturing into too many irrelevant categories that dilute the equity of the mother brand
Two great brand failures in the history - Colgate’s Kitchen Entrees, a line of frozen food products in 1982, and Cosmopolitan Magazine’s Yoghurt in 1999 indicate that if your brand’s association is very deep in one category, you should be cautious in stretching it to too many irrelevant categories.
7. Top management don't see the brand as an asset
Almost 70% of the business owners are sales-focused (short-term thinking), 20% are marketing-focussed and only 10% are brand-focussed. Most entrepreneurs are underinvested in the branding and less appreciative of the ripple effects of a great brand in the long-term growth and profitability.
8. Do not consider employee engagement as part of the brand strategy
Employee experience is directly proportionate to the customer experience. This holds great significance if you are in the service segment. Only a few visionary leaders realize this critical interlinkage between employee experience and brand equity.
9. Highly dependent on discounts and offers to achieve the quarterly sales targets
Warren Buffet famously said, “The single most important decision in evaluating a business is pricing power. If you've got the power to raise prices without losing business to a competitor, you've got a very good business. And if you have to have a prayer session before raising the price by 10 percent, then you've got a terrible business.”
Some companies use discounting frequently as a strategy to acquire new customers and this often affects the brand perception among the consumers and erodes the profitability.
Managing a brand is more like a tightrope walking. We need to balance between the short-term and long-term, understand the various interlinkages, and stay focused.
About the Author
Rajesh Srinivasan is a Chief Marketing Officer, Author and Keynote Speaker, he works closely with the CEOs/Founders and devises a robust growth and brand strategy that helps them to stay relevant. Recently he authored a book called – Growth Nuggets, he distilled 135 small bites of thought from his professional experience as a Marketing Strategy Consultant.