Brand values in marketing serve as the foundation upon which a brand’s identity is built. It goes beyond just the physical products or services a brand offers; it encompasses the emotional connection and perceived benefits that consumers associate with the brand. These values represent a strategic journey of continuous development, testing, and evolution to ensure they resonate with consumers.
In marketing language, brand values encompass the brand’s benefits and promises to consumers. This involves defining which aspects of the brand and its products are relevant, likable, usable, and helpful to buyers.
For example, a brand like Apple is not just selling smartphones and computers; it’s selling innovation, design, and a lifestyle that resonates with its target audience.
Creating and maintaining these brand values requires a significant investment in terms of resources—both financial and intellectual. It involves constant innovation, market research, and communication to ensure that the brand remains relevant and attractive to consumers. The goal is to shape and spread these values to more people, affirming that the more individuals find it valuable, the more the brand’s value is solidified. For instance, Coca-Cola’s brand value is not just about selling a beverage; it’s about the happiness and joy that people associate with its product. The more people believe that drinking Coca-Cola brings them joyful feelings, the stronger the “happiness” value of Coca-Cola becomes.
In essence, brand value is shaped by the collective perception of the crowd.
Endless Battle
In today’s digital age, where e-commerce and social commerce dominate the retail landscape, brands are engaged in an endless battle to capture consumer attention and loyalty. Metrics like clicks, downloads, sign-ups, and active users have become the new benchmarks of success.
But what happens after the initial clicks and downloads? This is where brand values play a crucial role. Brands need to deliver on the promises they make to consumers and consistently reinforce their value proposition. This involves providing exceptional customer experiences, personalized interactions, and relevant content that resonates with their audience.
Moreover, brands must also be mindful of the cost of acquiring and serving customers. While acquiring new customers is important, it’s equally important to ensure that the cost of acquisition doesn’t outweigh the lifetime value of the customer. This is where the concept of brand lifetime value becomes essential.
Focus Shift
With the rise of digital marketing and data analytics, marketers are beginning to realize that brand value is not solely defined by the size of the crowd. Instead, it’s about the quality of the relationship between the brand and each of its customers.
Marketers, especially those targeting emerging markets, must shift their focus from acquiring new customers to nurturing existing ones. This involves understanding the lifetime value of each customer—the total worth of their relationship with the brand over time.
Historic customer lifetime value provides insights into the contribution of existing customers to the brand’s revenue and helps in building profiles of ideal customers for future targeting. Predictive customer lifetime value, on the other hand, involves forecasting future revenue based on customer behavior and preferences.
By understanding the lifetime value of their customers, brands can develop targeted strategies to strengthen brand values, retain existing customers, and reduce the cost of acquiring new ones. This may involve personalized marketing campaigns, loyalty programs, and customer retention initiatives tailored to the brand’s audience, which should be the central focus of annual marketing plans.
Calculating Brand Value
Calculating brand lifetime value involves a combination of revenue and cost metrics.
The formula for brand lifetime value is: Brand Lifetime Value = (Customer Revenue per Year * Duration of the Relationship in Years) – (Total Cost of Acquiring and Serving the Customer * Duration of the Relationship in Future Years)
This formula takes into account the revenue generated by the customer over their relationship with the brand, minus the cost of acquiring and serving that customer. By understanding the lifetime value of their customers, brands can make informed decisions about resource allocation and investment in marketing initiatives.
In conclusion, the shift from focusing solely on acquiring new customers to nurturing long-term relationships with existing ones represents a fundamental change in marketing strategy. Brands that prioritize building strong brand values by maximizing customer lifetime value are better positioned for sustainable growth in the digital age.
