What makes winning brands grow?

From marketing investment to key KPIs, ‘winning’ brands – those that have seen revenue rise – share a number common characteristics when it comes to driving growth.

Every brand wants to be a winner, but the recipe for success requires some very specific ingredients.

‘Winning’ brands – those that have seen revenue growth – are more likely to take a combined approach to brand building and sales activation, for example, while a greater proportion ‘losers’ focus on sales alone, according to research by DVJ Insights, in partnership with Marketing Week.

Likewise, marketing is more likely to be seen as an investment rather than a cost at winning brands, which are also more likely to increase their marketing budgets next year and are in a better position to drive innovation compared to those classed as losing brands.

More winners see the value of combining sales activation and brand building

The majority of the 270 B2B and B2C marketers surveyed (72%) agree that a combined sales activation and brand-building approach to marketing is the most effective at generating growth. However, winning brands apply this strategy more often (75% vs 63%).

Losing brands put more emphasis on a sales activation-led strategies, with 23% suggesting this is the best way to make brands grow versus just 11% of winning brands.

More than a quarter (27%) of losing brands also believe sales activation is going to become more important over the coming year versus 17% of winning brands. Similarly, 60% of winning brands see a combination of sales activation and brand building continuing to play a pivotal role next to 49% of losers.

Marketing approaches will vary by category, but the survey reveals that although the brands focusing on short-term sales activation may see an uplift in immediate sales, they will lose out when it comes to long-term growth.

If you deliver products or services that anticipate and satisfy needs then you’ll create an atmosphere of inclusivity where innovations can shine.

Sahar Milani, Marks & Spencer

Les Binet, head of effectiveness at adam&eveDDB, agrees. Binet and marketing consultant Peter Field’s study into marketing effectiveness shows brand building is the main driver of long-term growth, but it must be balanced with the right amount of sales activation work in order to be truly effective.

“The two elements must work together to achieve lasting sales,” Binet explains. “An investment in the brand is a financial investment by the organisation, and sales activation helps to unlock the financial value from brand building quickly and efficiently.”

Winners are more focused on lead generation

The research shows lead generation and conversion is more important to winning brands (68%) as a KPI compared to losers (53%).

Of course, KPIs will vary from brand to brand, but winners’ emphasis on conversion means they are not afraid to increase marketing budgets to meet their goals, according the the study, and are also more inclined to work with a higher number of agency partners. Losers, meanwhile, have a stronger focus on the cost of marketing (43% vs 25%) and share of voice (23% vs 15%) as KPI.

Shaun Briggs, head of marketing at Specsavers, which was identified as a winning brand, suggests lead generation and conversion are two of the most important components of the marketing funnel.

“Without leads we’ve nothing to convert, and without conversion I’m wasting leads,” he says. “Nail both and I’m delivering optimum short-term results. Of course, if I’m ignoring the longer term when doing this, future leads are likely to be harder and more expensive to acquire.”

Winners are more likely to be set up for innovation

Some 59% of marketers believe innovation is a key driver of growth. But winners seem to be in a better position to drive innovation given 52% have seen their innovation budget increase over the past year compared to just 21% of losing brands. Likewise, a greater proportion of losing brands (22%) have seen their budget for innovation cut over the past 12 months versus just 7% of winning brands.

However, both winners and losers agree they do not have enough budget to support innovation (73% vs 71%), and suggest their business is not best set up to drive innovation (both 53%).

Why Deliveroo, Costa and BrewDog are growing faster than other UK brands

While both suggest innovation could happen faster, this is more of a concern for losing brands, 81% of which agree innovation doesn’t happen quick enough versus 66% of winning brands.

Sahar Milani, head of marketing for Marks & Spencer in the Middle East, and another brand identified as a winner in the research, says innovation, along with agility and authenticity, are more important than ever if brands want to stay relevant and connected to their customers.

“The key is to be able to innovate in line with ever-changing needs and lifestyles,” she says. “If you deliver products or services that anticipate and satisfy needs then you’ll create an atmosphere of inclusivity where innovations can shine. The winning brands are those that genuinely listen and act.”

Winning brands see marketing as an investment

Marketing budgets often come under pressure, but there is a stark contrast between winning and losing brands when it comes to investment. While nearly half (47%) of all winning brands saw their marketing budget increase year on year, just 13% of losing brands can say the same.

And this pattern isn’t likely to change next year, given just 22% of losing brands expect to see their marketing budget rise over the next 12 months versus 50% of winning brands.

A close link has always existed between a brand’s growth and its share of voice, and this does have an impact on budget allocation. Other factors are at play too, such as how much a brand’s competitors are spending.

We need to be ever vigilant to what our needs are and have a flexible partnership with our agencies.

Shaun Briggs, Specsavers

However, the brands that cut budgets, particularly during times of economic or political uncertainty, often lose market share and come out of any downturn damaged.

Amanda Griffiths, head of communications planning at Royal Mail MarketReach suggests the organisations that continue to invest in their brands even when times are tough tend to win out in the long term.

“You have to maintain your brand strengths and create a positive presence so your customers retain their confidence in you,” she says. “If you pull back too much on your marketing your customers get nervous and move to brands that seem confident. In a digital age it is too easy to forget brands – just look at the high street.”

Winning brands work with more partners

Another similarity among winning brands is the fact they tend to work with a higher number of partners. Winners have worked with almost twice as many agencies as losers in the past 12 months (6.1 vs 3.3). One reason is that many companies have invested in technology and talent and in-sourced their capabilities.

Specsavers’ Shaun Briggs says a brand must recognise its capability gaps and use the right agencies strategically to plug them.

“This is reasonably easy to do in a moment-in-time way; the challenge is how to maintain this alignment as your needs change,” he says. “We need to be ever-vigilant to what our needs are and have a flexible partnership with our agencies.”

What else could help a brand become a winner?

The research also looks at whether adopting an agile marketing approach could help more brands be winners. However it’s probably too early to say given only 9% of those questioned have implemented agile marketing, although another 25% are looking at ways to implement it.

Respondents were also asked about influencer marketing. Some 44% are using the technique but this is an area perceived by many (57%) as too short term. More than half (58%) agree consumers will soon regard influencer marketing as a marketing trick too.

Binet says: “Influencer marketing can work in a certain context, for example to reach younger consumers, but in general the exposures that big brands get are tiny compared to a high-profile TV commercial.”

There are some clear distinctions between brands that succeed in driving growth versus those that don’t. Brands that want to become winners should take note of the characteristics connecting the most successful brands in order to turn their fortunes around.

Winners versus losers

  • Most brands see the value of combining sales activation and brand building to generate long-term growth, but winning brands apply this strategy more often.
  • As a KPI, lead generation is a more important for winners, while losers have a stronger focus on the cost of marketing and share of voice.
  • Winners are more likely to see their marketing budget increase over the next 12 months.
  • The majority of marketers see innovation as a key driver of growth, but more losers than winners complain about the speed at which innovation happens in their organisation.
  • Winners have worked with double the number of partners as losers over the past 12 months.

Recommended

Comments

    Leave a comment

    Subscribers enjoy unlimited access to unrivalled coverage of the biggest issues in marketing, alongside practical advice from the digital experts at Econsultancy.

    With a subscription to Marketing Week Premium you will get full access to:

    > World-renowned columnists

    > Analysis & case studies

    > Exclusive leading-edge insight

    > Carefully curated reports & briefings from Econsultancy

    > Plus, much more including a £300 discount for the Festival of Marketing

    Subscribe now