BRAND SUCCESS – THE VITALITY QUOTIENT
Five ways to give French brands a new lease of life
Just as there are many contributors to human wellbeing, there are multiple factors that go towards building a healthy brand.
BrandZ analysis has identified five key attributes shared by healthy, strong and valuable brands that each reflects the extent to which a brand is delivering Meaningful Difference – a vital contributor to Brand Value.
Brands that score highly on all five aspects are the most successful: they are “healthy” brands. Those that are low on all five aspects are “frail” and the least successful. Brands with a mix of high and low scores are “OK”.
These five key health 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 fighting fit. A vQ score of 95 or under means it’s time to call an ambulance.
Nurturing brand health 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, globally, 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 are those with high vQ scores: names like Google and Ikea.
The five key indicators underpinning strong brands and contributing to vQ are:
1. There’s a strong sense of brand purpose, so the brand makes people’s lives better
2. Brands must be innovative, which means they’re seen as leading the way in their sector and shaking things up.
3. They must also have strong communications, with creative powerful and memorable advertising.
4. They provide a great brand experience that meets consumers’ needs, and is available when and where consumers need it
5. Over time, consumers come to love the brand, and that helps sustain the brand until the next innovation.
Healthier High Vitality brands are, on average, worth more
As well as having a positive effect on brand value, health vitality also has a direct effect on the ability of brands to predispose customers to buy them. This is a measure we call Brand Power, and its relationship with vQ – evident in the graphic below – ought to be enough to make even the most fitness-shy brand manager want to think about going on a health kick.
Brands can look at how they perform on the five individual health indicators when they are seeking clues to improving their overall brand health vitality. When one or more of the indicators is flagging, overall brand health success can suffer.
Time to get a check-up
There is ample scope for the majority of brands in the French Top 50 to improve their health vitality.
Among brands in the French Top 50, the average vQ score is only 107, which makes them only 7 percent healthier better than the average of all French brands. While these scores underline the relative strength of the Top 50 compared to the rest, it is not the glowing picture of health we would hope to see in the country’s most valuable brands.
When we look at brand vitality data going back three years, compiled as part of the Global Top 100 BrandZ rankings, it is clear that that French brands’ mediocre scores is are not a new phenomenon. The Top 10 French brands had a vQ score in 2014 of 105, making them only 5 per cent better than the average of all brands. Since then, those brands have flat-lined; their vQ score in 2018 is still 105.
Only 18 percent of the Top 50 Most Valuable French Brands are classed as healthy, and the vast majority are in “OK” territory, while 6 percent are frail. Among a broader pool of more than 1,350 French brands researched by BrandZ, only 5 percent performed well across all five vQ health indicators. Most worryingly, 34 percent of all French brands failed their brand medical and are classed as being frail. This makes them highly vulnerable to being undermined by disruptor brands.
To some extent, this malaise is affecting brands across Western Europe; BrandZ research shows similarly lacklustre brand health vitality in the UK and Spain. Fast-developing economies such as those China, India and Indonesia are rapidly growing the financial value of businesses there, and at the same time are proving to be hotbeds of innovation. In a sense, it may seem unfair to make such a comparison, given that conditions for brands are so different in these countries. But French brands should also consider that the most valuable global brands – brands that are on their doorstep, and many of which have come from the US – are simply bursting with good health vitality.
What’s the prognosis?
The healthiest brands in the Top 50 Most Valuable French Brands 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) far higher than the 100 average for all French brands.
A high vQ score benefits a brand in several ways. Brands with a high vQ have almost three times the Brand Power, which is an indicator of their ability to drive sales. They are better positioned to be able to justify a premium or to feel “worth it” to consumers. And their Potential for future sales is 30 percent above average.
Brands with a high VQ are more strongly positioned for future value growth.
The above brands are not only the most healthy in the BrandZ Top 50; they’re also the healthiest of all brands in France, even when we take into account some of the smaller brands that don’t make the Top 50 ranking because of a lack of scale. Yves Rocher is the only brand outside the Top 50 that makes the Top 10 for health in France.
On average, retail brands have the highest vQ scores among categories in the Top 50, followed by utilities and transport providers, with finance brands having the lowest average vQ scores.
The threat to brands in France does not come only from other French brands.
There are strong global rivals in many categories, led by Facebook, Amazon and IKEA, which are all in top condition when it comes to brand health.
The route to greater vitality
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 France, 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.
Purpose in action - Decathlon
The sports goods retail chain Decathlon has a clear mission to put the best and latest products within easy reach of consumers – and at affordable prices. Its activities are shaped not just by bright minds at corporate headquarters but also by customers themselves, with collaboration and creative workshops involving members of the public a strong part of the way Decathlon develops. The brand’s message is: “Sport for all. All for sport”.
Innovation is not just something that technology brands are good at. Any brand that is seen as doing something new, leading the field or setting trends for their category, will get talked about and tried. When trial meets or exceeds consumers’ expectations, that can lead to longer-term use and, eventually, to love, which correlates strongly with innovation. Innovation can mean developing a product that does something different, providing an innovative service, or expanding into a new category. Crucially, for a brand to be seen as innovative, it is not enough simply to innovate. Developments must be communicated to consumers, if they are to associate innovation with the brand. Innovation creates a strong predisposition for sales, and the 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. In France, telecommunications providers collectively have the highest average innovation score, and finance brands are seen as the least innovative, but there are individual innovators from other categories.
Innovation in action - L’Oréal Paris
This is a brand with more than a century of heritage behind it, and has had the same tagline – “Because you’re worth it” – for 46 years. But L’Oréal Paris stays relevant by innovating both its product line and its communications. The brand is using scientific advances to shape the future of beauty, targeting millennials with its Colorista and Paint ranges, and opening up the natural segment with Botanicals. The faces of its advertising evolve too; blogger Kristina Bazan is a YouTube partner of the brand.
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 to have something genuinely engaging to shout about. Brands therefore need to do great things, and then let people know 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 communications 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.
Communications in action – Evian
Evian’s “Live young” campaign has made a big impact on consumers in what is a difficult category to promote. The brand’s communications tend to feature babies, and the Live Young campaign was an opportunity to have fun with the idea that everyone was young once. Babies dressed in adult clothes – adults who have become young again after drinking Evian – have been generating shares on social networks, and the brand has recently branched into Snapchat.
A brand not only has to deliver a great experience at every point of interaction, and help consumers at every step, it also has to remind consumers, through effective communications, that it is focused on doing this well. Experience starts long before a person considers buying a product, and lasts well beyond the moment of purchase and even the moment of consumption. It includes every exposure to an ad, every experience on a brand’s web site, and every minute they spend waiting for help at a counter or on the phone. Providing a great brand experience cements the relationship between consumers and brands. Those brands in the Global Top 100 that deliver the strongest experiences have grown in brand value by 188 percent in 12 years. Those brands with low experience scores have only increased their value by 18 percent in that time.
Experience in action – Air France
As European air travel becomes focused on budget travel options, Air France is concentrating on the quality of the experience it provides – both in the air and when customers are planning their trips – to justify their higher-end pricing. The premium experience on board is linked to French styling and innovation; virtual reality headsets for in-flight entertainment are being trialed. The brand has also launched the Air France Press app, so passengers can download premium content from newspapers, magazines, as well as movies and TV content.
Some of the most loved brands in the world are also the most innovative – brands like Nike and Apple, for instance. Love in this context is the emotional affinity of a brand, and it’s something that can’t be bought or manufactured. However, the conditions in which love can flourish can be created. If brands take the time and care to invest in promoting a higher purpose, innovating, and delivering a consistently great experience, then love tends to happen naturally. In the times between innovation, love is often what sustains the consumer relationship with a brand.
Among the most-loved brands in the BrandZ Global Top 100, brand value has risen an average of 191 percent over 12 years, while those with poor love scores are up just 32 percent.
Love in action - Michelin
This is a category that few would imagine gets much consumer attention at all, except on the day that people find they need to replace their old tires . And yet Michelin is more than liked, it’s loved. The brand is famous not only for its products but also for the “Michelin man”, named Bibendum, who has been the brand’s mascot for decades. This is a classic example of a brand that over many years has delivered or gone beyond what customers expect from it; they keep coming back, and this affinity between brand and consumer results in love.