build BE mar alone is not enough

Marketing must create branding that is based on delivering critical elements of value and must design marketing communications and customer experiences to reinforce that value.. Keywords

Richard Schreuer Richard Schreuer is a senior vice-president at Chadwick Martin Bailey, Inc., a Boston, Massachusetts, market

research and consulting firm that uses advanced, proprietary research and measurement to help its clients identify and

penetrate markets, develop products, improve service delivery, and build brand value

(www.ChadwickMartinBailey.com).

Abstract New technologies and distribution channels are creating

an environment in which branding will become more important At

the same time, consumers are becoming increasingly sophisticated

about the relationship between brand promise and performance

Marketing must create branding that is based on delivering critical

elements of value and must design marketing communications and

customer experiences to reinforce that value Brand managers must

understand the nature of customer-company interactions and have

the influence to act when there is a problem

Keywords Brand equity, Marketing communications, Brands,

Customer satisfaction, Consumer behavior

T he management of customer satisfaction and

the management of brand have traditionally

been worlds apart Those focussing on

operations or ``quality'' run customer satisfaction

programs, while those involved with marketing

communications run branding initiatives This distinction is artificial, because in the end, both are striving toward the same goal: positively influencing consumer behavior Indeed, this barrier separating operations and marketing communications is harmful because, in reality, both drive the brand

Marketing communications tell consumers what to expect from a brand, and operations deliver on those expectations By exploring this simple premise through studies demonstrating the central role played by operations on brand image, we can see how those charged with managing brand communications ignore operations and customer satisfaction at their peril Not only must brand managers understand how operations interact with customers, they must also influence the nature of those interactions for brand building to be successful

The impact of operations Organizations have traditionally used advertising and other forms of marketing communications as the means

to build brand equity This is not surprising, since much

All studies referenced in this article used telephone as the data

collection method and had full-probability samples ranging from 650

to 2,200 projectable to specific populations.

of the early work in branding was done in the

packaged-goods industry Recently, there has been a resurgence in

interest in branding as companies in many industries

have embraced brand development as the mechanism to

create competitive distinctiveness in the battle against

being turned into commodities

This renewed interest in branding creates the need to

better understand how brand equity is built and

maintained A number of recent articles have stressed

that rather than being solely created by marketing

communications, brand equity is developed by an entire organization[1-3] This view points out what marketers intuitively know, but seldom manage, that, while marketing communications tell consumers what to expect from a brand, their experiences with the brand also play a critical role After all, it is these experiences that reinforce or undermine brand expectations Thus,

in this view, marketing communications and operations play synergistic roles in driving brand equity

Do ``great ads'' build a brand?

Lately, it has become painfully apparent to everyone in the Internet community that traffic count, ``click-through rates,'' and sticky eyeballs are not enough Wall Street and private investors have turned a corner in their attitude, requiring those they invest in to now show clear evidence they can not only attract Web site traffic but transform it into revenues and profit In this new environment, many seemingly good e-ideas are doomed to fail because of inattention

to the real world dynamics of brand building

Up to now, most dot-coms have been measuring the effectiveness of their multi-million dollar advertising and marketing campaigns in terms of public awareness levels, image, and volume of traffic Indications that such activities are going well have been judged as evidence of successful brand building But consider a company we will call ``X.Com'' that had been experiencing tremendous success in driving traffic to its Web site On closer examination,

it was learned that more than 30 percent of those who had visited within the previous 30 days could not even remember having been there Though X.Com had been very effective in building traffic and brand awareness, the question loomed: Had they also, in fact, been building a genuine brand?

In the current Internet environment, more and more dot-com managers and their financial backers are recognizing that, regardless of the business model used, a brand is not truly a brand if it fails to systematically drive revenue-generating behaviors capable of competing vigorously with existing and emerging competition The only way to effectively measure brand today, then, is in terms of its direct impact on the types and amounts of revenue-generating behaviors that the company's business model requires in order to succeed

Consider the example of an online financial services marketplace, a client of ours we will call ``Y.Com.'' This company had hired an advertising firm to launch a major ($40 million) national visibility campaign, but the company's executives also sensed early on that they should do more than that They wanted to track not just awareness and Web site traffic, but the online experience of their customers and prospects as well After our firm showed them how to take these measurements, they were able to maintain brand focus and consistency by continuing to refine and deliver messages of value every step of the way Thus, the progress of the campaign could be both evaluated and guided not only in terms of the pull numbers of the advertising, but within the context of overall brand building and brand implementing as well

By looking at how to communicate key elements of value and how to deliver on these key elements of value in a holistic way, Y.Com demonstrated an understanding that its brand would best be built by each individual touch, direct or indirect, large or small The process, of course, begins with marketing communications, then continues with each and every customer interaction that follows

To do it right, brand must be viewed as a vehicle for continuously driving value and competitive distinctiveness You cannot just go out and purchase brand value, even for $40 million, and then move along to other things Advertising effectiveness research and Web site traffic, though useful in determining where one stands relative to the competition, are not by themselves enough Brand-builders must keep meticulous watch over the effectiveness of next steps, i.e getting folks to take revenue-generating behavior The key to achieving more aggressive goals, such as dominating a highly competitive market space, will be found in measuring and monitoring such customer behavior As Y.Com's leaders rightly understood, ``management by hunch'' alone will not cut it in this environment

So Y.Com set out to gather several types of information in order to effectively manage its brand building by driving Web-based, revenue-generating behavior These included:

^ basic advertising effectiveness tracking, i.e awareness and traffic;

^ competitive brand awareness/image information, such as what value new customers perceived in Y.Com vs other partners (both Internet and traditional) in the market;

^ specific elements of competitive value (value drivers) that moved prospective customers from one stage of the online conversion process to the next, culminating in measurable revenue-generating behavior;

^ specific barriers that prevented movement from one stage of the online conversion process to the next, blocking measurable revenue-generating behavior

Once determined, stage-specific value drivers could be incorporated, where applicable, into customized marketing communications messages and aligned with the online experience so that, at each stage, appropriate elements of competitive value that drive the desired behaviors were being systematically delivered The result of such revenue-based, value-driven information systems is a powerful tool that allows any Internet business model to ensure that its marketing campaigns project competitive value while its online experiences consistently deliver it This revenue-results orientation supports market-aligned resource allocation decisions across all areas of the company, serving as the foundation for both understanding and for quantifying substantive returns on those investments

When the dust settles, Internet businesses that learn these principles will be the only ones left standing Cool technology and lots of hot ads may be fun, but they are clearly not enough to create and sustain viable business enterprises Instead, genuine value delivered through the onsite experience (and any subsequent fulfillment) leads immediately to revenue, repeat visits, and positive word-of-mouth, earning a company enough time for its marketing investments to pay off In the final analysis, it will not be the size of their marketing investments that will kill off most dot-coms, but what comes (or does not come) afterwards If not delivering value with every visit and every click, all too many dot-coms, in the blink of an eye, will be dot-gone

Seeing operations as playing a role in branding has a

huge impact on how we view customer satisfaction and

loyalty Operations tend to focus on managing process

improvement with a goal of ``customer satisfaction.'' But

this focus on process is myopic, and it is partially

responsible for the fact that in many cases ``satisfied''

customers defect and ``loyal'' customers lose their loyalty

because of, for example, price cuts by competition or

lack of product availability

Introducing

satisfaction and loyalty

into the mix with brand

dramatically changes the

relationship between

marketing and operations

In this management view,

operations must do more

than simply produce

satisfied customers; they

must reinforce the brand's

value proposition Thus, it

is not, for example,

enough to respond to

customers quickly ± such

basic levels of customer

satisfaction are now the

price of entry in a

post-TQM world For a

product or service to rise

above commodity status,

the nature of the customer

contact must reinforce the

brand value the customer

has been told to expect

For example, the

marketing

communications tagline of

a Boston-area,

audio-video retail chain is

``audio, video, and a boat-load of know-how'' delivered

in a manner that suggests a sense of camaraderie

between customers and sales staff The company

believes this message captures the central brand-value

driver ± the reason that customers should choose this

brand over the competition In this case, brand

managers must have the means to measure the degree to

which operations are delivering on their promise and the

influence to effect change if necessary

This view of branding has the potential to broaden

the role of marketing In organizations fully committed

to driving their brand equity, the entire organization

becomes united behind the brand Thus, marketing will

at the very least become involved in measuring

higher-level brand components of customer satisfaction, and

ideally will become involved in helping operations

deliver on brand expectations This is the wave of the future for driving brand equity

This view of the relationship between satisfaction, loyalty, and brand equity has serious implications not only for the measurement of brand equity but for its management as well As this view takes hold, it will transform the roles of marketing and operations and how they relate to each other

Measuring the link

In recognizing the link between customer satisfaction and brand, we must first recognize that both are being leveraged to drive positive consumer behaviors that generate revenue, such as purchase, share of wallet, and advocacy Well-designed customer satisfaction and brand studies both have behaviors such as these as their outcome measures Customer satisfaction work seeks to explain and optimize behavior through improvements in customer interactions Branding work seeks to explain and optimize behavior through improvements in

competitive image positioning

Since both are trying to explain the same outcomes,

it is possible to build an integrated measurement model This measurement model is at the heart of the link between customer satisfaction and branding The model recognizes the simple fact that brand image and subsequent brand-driven behaviors are generated by both marketing communications and operations Through systematic measurement of exposure and reactions to company operations and marketing communications, it is possible

to determine the relative impact that each is having on brand image and consequently on consumer behavior

In practice, this approach yields critical insights about the role of operations in brand management Here are three examples of how the integration of what would typically be a customer satisfaction measurement can impact brand management

``Marketing communications tell consumers what to expect from a brand, and operations deliver on those

expectations.''

Case 1 Acting before a new brand is destroyed

This company was launching a new automobile

insurance brand The company wanted the brand to be

positioned as relatively low-cost and relatively

high-service Initial positioning research found that this

position was not occupied by competitors and was

credible ± so long as the brand communication gave a

rational explanation of

how such a positioning

was possible, e.g

leveraging new

technologies and direct

sales channels Marketing

communications in

support of the launch

were highly successful;

inquiries flowed into the

sales center

Consumers' greatest

sense of brand value was at

their point of purchase,

but as soon as they

reconnected with the

company as existing

customers, their sense of

the brand began to

tumble, along with their

loyalty and advocacy rate

Unfortunately, the call

volume had outstripped

the company's ability to

deliver on the high

expectations set in the

marketing

communications When

confronted with the choice

of working on a new sale or handling an inquiry from an

existing customer, the existing customer was given short

shrift (see Exhibit 1)

In this case, a strong initial brand-building image campaign was undermined as the company's operations could not deliver on expectations of great service Luckily, the company avoided a ``brand death spiral'' because senior management made the decision to reduce marketing communications for about six months until the company was actually prepared to deliver on its

brand promise

Case 2 Stopping a new brand campaign before it

is too late

In this case, a company attempted to launch a new brand positioning campaign before determining if its current level of customer satisfaction would support the new position This health-care manufacturing and distribution company had begun work on creating

a new brand position centered on the concept of adding value by helping clients manage shrinking resources Research conducted to support the branding effort uncovered surprising insights:

^ The new position was salient in the market It had the potential to be a compelling foundation for a new branding campaign

^ However, structural equation modeling revealed that the brand image of the company was formed more by experiences than by marketing

communications

^ The company's core processes were out of alignment with customers' expectations They were planning to expand a brand that was not performing

at its core

Exhibit 2 illustrates the poor state of the company's core processes and their impact on the brand Only 4 percent

of customers were highly satisfied with all the core processes, even though every one of this small number of customers gave the company a strong brand-value score

At the other extreme, 49 percent of the customers were not highly satisfied with any of the core processes, and only 28 percent of this group give the company a strong brand-value rating

Had this company proceeded without understanding the relationship between customer satisfaction and

``For a product or service to rise above commodity status, the nature of the customer contact must reinforce the brand value the customer has been told to expect.''

Exhibit 1 Ð A strong beginning is undermined by

experience

brand image, the results would likely have been

disastrous Not only would the expanded positioning not

have resonated, but the disconnect between what

customers were being told and what they would have

experienced could have exacerbated an already bad

situation As a result of this new perspective, the

company put the new branding campaign on hold while

operational issues were resolved

Case 3 Gaining a complete understanding of a

brand

An industry-leading retailer concerned about protecting

its ``premium'' position in the market needed to

understand the mechanics of its brand One concern was

that despite significant advertising spending, tracking

studies showed little effect The research showed

surprising results (see Exhibit 3) First, brand image was

driven more by consumers' experiences in the retail

setting than by marketing communications Second,

while communications had little impact on image, they

did influence shopping behavior Unfortunately, some of

this influence was a concern because, while price-based

promotion communications helped short-term sales,

they were undermining the ``premium'' position of the

brand

As a consequence of this understanding, the retailer is

focussing attention on using customers' store

experiences as an opportunity for branding by creating

unique experiences that will underscore the central

elements of the brand's value Furthermore, marketing

brand messages are being reevaluated in an attempt to

make them align with and reinforce the in-store

experiences In the long run, marketing communications

will be more effective, because the messages will be

reinforced by the actual experiences of customers

Conclusion New technologies and distribution channels are giving consumers access to better information, more choices, and lower ``costs of switching.'' In this environment, branding will become more and more important Yet, as branding becomes more important, consumers are becoming increasingly sophisticated about the relationship between brand promise and performance Brands that do not deliver on expectations will suffer as customers not only leave but also share their experiences with acquaintances and through consumer-information Internet sites and chat rooms

This not only raises the stakes for branding, but also raises the profile of marketing Marketing must be in a position to create branding that is based on delivering critical elements of value, and must design marketing communications and customer experiences to reinforce that value Under this view of branding, ``customer satisfaction'' is no longer the sole domain of operations Brand managers must expand their measurement so they understand the nature of customer-company interactions and have the influence to act when there is a problem S&L

References

1 Aaker, D., ``Building brands without mass media'', Harvard Business Review, January 1997, pp 39-40, 41, 44-6, 48-50.

2 The Center of the Dashboard: Aligning Sales, Service and Brand to Combat Customer Attrition, The Corporate Advisory Board, Washington, DC, 1998.

3 Schreuer, R., ``Putting a brand on the changing banking industry'', Boston Business Journal, Vol 18 No 24, 1998, p 36.

communications on brand and behavior