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 assigned to a brand is the result of extensive consumer research, so it reflects 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. It 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.
Brands with high scores for brand contribution tend to be resilient to challenges in the market and outperform their competitors when it comes to value growth. If a brand scores highly on this measure, consumers are predisposed to choose it over its rivals and are more likely to be willing to pay a premium for it.
Looking at American brands over the last 12 years, those with high scores (4-5) on brand contribution have grown their brand value 307% on average. Brands that have low brand contribution decreased 10% in Brand Value over the same period.
This clear correlation between brand contribution and growth in Brand Value proves the importance to business of investing in brands. Eight of the Top 10 brands in the United States Top 100 this year have a high brand contribution score, while none have a low one.
We can show the value of brand contribution by looking at numbers 45 and 46 on the Top 100, LinkedIn and Adobe. While both are strong brands, LinkedIn comes out with a higher valuation than Adobe, even though the latter certainly generates more revenue. Brand contribution also multiplies the financial strength of a brand. ExxonMobil and Colgate have nearly the same brand value, but the former is one of the world’s largest companies by revenue. Colgate’s brand value is, thus, far more brand-driven.
In the United States, top brands by brand contribution come from many different categories, but all are household names in their home market. Pampers and Huggies diapers, for example, are able to charge a considerable premium over generics—while still maintaining large market shares.
WAYS TO WIN
The brands that top the list in brand contribution are varied, but all stand out for the clearness of their purpose. Many are also well known brands that have been around nearly since the beginning of their industries. Pampers was the first nationally-distributed diaper in the United States, as was Tide for the detergent category. Gillette invented the safety razor. Disney produced the first feature-length animated film widely seen in the country. But some of the brands are new innovators with highly distinct identities, like PayPal and LinkedIn. All of them, however, aim at something more than a simple product or service. They have a strong mission that resonates with their customers.
Brands can build their brand contribution by:
· Defining what makes them meaningfully different. Don’t merely be the best product in your category; set higher goals to improve your customers’ lives.
· Connecting with customers with emotion at touchpoints where they are open and receptive to the brand. Showing you understand them means that you know not just how to talk to them but when.
· Making sure customers understand what your purpose is and the value you bring. Effective brand communication is essential.
Theory in Action
Pampers has the highest score for brand contribution in the 2018 rankings. This demonstrates an important difference about the BrandZ rankings. In valuing brands, BrandZ only uses relevant customers—in this case, largely those with babies. At such an exciting (and sometimes scary and exhausting) time, the brand provides a range of products that help these parents make their babies happy. Pampers is also a highly innovative brand, continually making small changes and introducing new products that improve its customers lives. As a result, it scores highly on a range of positive attributes, making a real, meaningful difference in the lives of its consumers.