Brand Health : Five ways to build healthy Dutch brands
Just as there are many contributors to human wellbeing, there are multiple factors that go toward building a healthy brand. BrandZ™ analysis has identified five key attributes shared by strong and valuable brands. Brands that score highly on all five aspects are the most successful: they are “healthy” brands. The five aspects are:
1. A strong sense of brand purpose, meaning that the brand makes people’s lives better
2. Innovation, defined as a brand being seen as a leader and change agent in their sector
3. Strong communications, with creative, powerful, and memorable advertising
4. A great brand experience that meets consumers’ needs, and is available when and where consumers need it
5. A sense of brand love that’s built with consumers over time, and that helps to sustain the brand until the next innovation.
These five key 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 regard as especially healthy.
Brands can look at how they perform on individual components of vQ when they are seeking clues to improving their overall brand health. When one or more of the vital signs is lacking, general brand health can be suboptimal.
Nurturing brand vitality makes good business sense. A strong vQ score means a brand is meaningfully different, and this can drive growth in brand value. In fact, global data shows that 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 globally are those with high vQ scores: names like Google and Ikea.
THE HEALTHIEST BRANDS IN THE DUTCH TOP 30 BRANDS 2018
The average vQ of all brands is 100
WHAT’S THE PROGNOSIS?
The healthiest brands in the Top 30 Most Valuable Dutch Brands ranking are those that score well on all five of the key health indicators: purpose, innovation, communications, experience, and love. They generate a Vitality Quotient (vQ) significantly higher than the 100 average.
Healthy brands tend to develop a personality type that further reflects well on them. Those brands with a high vQ score are more likely to be described as trustworthy, “in control,” desirable, creative, and friendly. They under-index on negative brand personality traits, such as being uncaring or arrogant.
Brands with a high vQ are more strongly positioned for future value growth.
How Dutch brands measure up
Brands that make the BrandZ™ Dutch Top 30 ranking this year are significantly healthier than average brands in the country. This is to be expected, and underlines the role of brand vitality in driving higher brand value.
The average vQ score of the BrandZ™ Dutch Top 30 is 117, compared to the score of 102 found by averaging the vQ scores of all the Dutch brands analyzed by BrandZ™. Leading Dutch brands also compare well on Brand Health when held against their peers in other countries. The brands in the Dutch Top 30 have a higher average vQ than those in the BrandZ™ USA Top 50 (114), Italy Top 30 (111), UK Top 30 (108), and Spain Top 30 (106).
THE PATH TO BRAND VITALITY
1. Brand 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 delivers. Having a strong sense of purpose is increasingly important in the Netherlands, 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.
The average brand purpose score across all companies is 100. The average brand purpose score of the BrandZ™ Dutch Top 30 is 113, which is well within the “healthy” zone and comparable to top brands in other leading European countries like Germany and Italy.
Leading brands in the Dutch Top 30 for Brand Purpose
BRAND PURPOSE IN ACTION
Brand purpose and innovation are an especially powerful, and typically Dutch, combination. Albert Heijn has embraced the cause of healthier living by introducing category-leading vegan takeaway and grocery options – moves that also underscore the brand’s innovative history of introducing new food trends to the Netherlands. Jumbo, meanwhile, links its innovative quest to continually lower grocery prices to its famous “Seven Certainties” brand principles.
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, brands can build a longer-term relationship and, ultimately, love, which correlates strongly with innovation.
Innovation creates a predisposition for sales. Innovation can sometimes mean developing a product that does something different, providing an entirely new service, or delving into a new category. It can even mean creating a new brand.
But boosting a brand’s innovation halo can also mean investing more in advertising to communicate what is already unique and exciting about an existing brand. Innovation doesn’t have to mean disruption (although of course it can include this). Innovation can also mean increasing flexibility and nimbleness – by finding new ways to deliver existing products in convenient formats, or for radically better prices.
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. The average innovation score of 107 for brands in the Dutch Top 30 is higher than the innovation average for the top British, French, Spanish, and Italian brands. The Netherlands’ top brands are tied with Germany’s for the highest average innovation score in Europe.
Leading brands in the Dutch Top 30 for Innovation
INNOVATION IN ACTION
Home retailer Action has won itself a high innovation score not by inventing new types of technology, but through its obsessive, rigorous mission to sell high-value products for the lowest possible prices. This mission is supported by a unique retail strategy of selling limited-supply lots of doorbusting deals – an innovative format that encourages shopper excitement and repeat visits.
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 recognizable 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 communication 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. The average communication score for brands in the Dutch Top 30 is 109.
Leading brands in the Dutch Top 30 for communication