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Presentation with audio commentary on trends that are affecting brands and brand strategy. Marketing and brand thinking from Justin Basini (www.basini.com) and Tom Farrand (www.pipelineideas.com). First presented at the Financial Services Forum, October 2009.
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Endsleigh Insurance
Justin Basini Tom Farrand
[email protected] [email protected]
www.basini.com www.pipelineideas.com (online Nov 2009)
@justinbasini (Twitter) @tomfarrand (Twitter)
Blog: www.blog.basini.com
The true value of brandsFinancial Services Forum October 2009
Endsleigh InsuranceWe’d like the session to be interactive
Endsleigh Insurance…and challenging
Endsleigh InsuranceBecause we haven’t got all the answers
Endsleigh InsuranceWhy we are here
Endsleigh Insurance
“The true value of brands is not
exploited in financial services”
Endsleigh Insurance
1. How do you define the true value of brands?
2. Using your definition and examples, explain why you agree or disagree with
the statement
3. What one thing could organisations do to unlock more value from brands?
The true value of brands is not exploited in financial services (15 mins)
Endsleigh Insurance1. Sustainability – brand as a source of competitive advantage
Brand value is what people say about you
What you stand for? Your values
Point of differentiation through what you stand for
A premium – loyalty, better value
Brand and customer experience
2. Virgin part of a larger portfolio, Co-op contribute to the environment (belief?)
Adding value over and above price
Financial services brands are afraid – connecting with the reality
Brand is about internal alignment over and above logo and graphics
Lack of bravery – prevailing mediocrity
3. Customer insight, service not sales
Brand coming from the top down – embedded throughout the organisation
Bravery in leadership – leadership (CMO/CEO) turnover
Consistency and sustainability
Measurement – bridging the gap between “feeling” and numbers/value
Listening to customers, constant dialogue
Is there any talent in marketing in financial services?
We are brand guardians in marketing, the whole organisation owns the brand
The true value of brands is not exploited in financial services (15 mins)
Endsleigh Insurance
Building on that…A point of view
Endsleigh InsuranceTheme #1Brands can be powerful psychological entities …
… for customers
… for employees
… for shareholders
Endsleigh InsuranceBrands are coherent ideas that connect with our
brains and influence what we think and do
Endsleigh InsuranceTheme #2But we‟re creating another hidden bubble in our economy
Brand asset
value is
outstripping
perceived
customer value
Endsleigh InsuranceThe „brand bubble‟
Intangible brand value
estimated on balance sheets
Consumers’ actual perceived
value of brands
Price
Cost
Value to company
Value to consumer
The brand bubble
Source: John Gerzema/Edward Lebar Y&R, Market Leader, Sept 2009
Endsleigh InsuranceIntangible assets are making up a larger proportion of enterprise value
0
10
20
30
40
50
60
1950s 1960s 1970s 1980s 1990s 2000s
% e
ntr
eprise v
alu
e
Source: BAV databases and Y&R historical research (Market Leader Sept 2009)
Endsleigh InsuranceThat number is still increasing…
2006
72% of value of Dow Jones Market Cap is intangible
Fortune
2007
70% of value of S&P 500 is intangible
Accenture
Source: Market Leader Sept 2009
Endsleigh InsuranceFor strong brands, brand value as total of company value is greater still…
84%
Source: Brand Finance, Market Leader Sept 2009
Endsleigh InsuranceThe „valuation gap‟ according to consumers
Source: BAV 1993-2007 brand data. Copernicus, Jack Trout and Kevin Clancy (Market Leader Sept 2009)
Perception
If brand value is increasing….
So should brand trust
Brands should be more liked and admired
Brands should be better known
Quality perceptions should be increasing
Brands should be more differentiatedDifferentiation declined in 40/46 categories
(inc. financial services)
Quality perceptions decreasing
24%
Less salient than ever
20%
Less liked and respected
12%
Less trusted than ever
50%
Reality (over last 10 years)
Endsleigh Insurance
Why?
The valuation
models don‟t
recognise the
customer reality
Endsleigh Insurance
This is being driven by the convergence of four major trends that are
causing major disruption
Endsleigh InsuranceTrend #1
Our economic model is
no longer delivering improvementsin our well-being
By engaging, brands can work with customers to deliver solutions
Endsleigh Insurance
1840 2008200019501900
We are certainly getting richerWe are certainly getting olderWe are working more
We are getting fatter
More crimeWe are voting less
Endsleigh Insurance
1840 2008200019501900
Overall we are not getting more satisfied
Endsleigh Insurance
We’re consuming resources as though there are 3 planets, not 1
Sustainability isn’t compatible with consumerism in it’s current form
Trend #2
Source: WWF, One Planet Living 2009
Brands can lead the agenda across markets with customers and employees,
to deliver a more sustainable future
Endsleigh Insurance
Consumerism, and the marketing that drives it, developed with the aim of maximising the use of available production
We built in planned obsolescence to productsChanged categories to be consumption basedInvested in constantly adding and not taking anything away
Endsleigh InsuranceThe population explosion of the past 200 years means that not
all developing economies can take the same approach
There are not enough resources
Source: WWF, One Planet Living 2009
Source: US Census
Endsleigh Insurance
So we will either create more competition for resources like commodities and energy
Endsleigh InsuranceOr we need to explore and create new models
Putting the wider sustainability and social agenda at the heart
Endsleigh InsuranceIn financial services, there are some with radical vision
“Valuable though these activities unquestionably are, there is an overriding need to
extend the understanding of corporate sustainability to include responsibility for
building the business as a whole in a way which enhances the common good.
Corporate sustainability is not an adjunct to the company‟s business, it is about the
raison d‟etre of the company itself.”Sir Stephen Green, Chairman HSBC, Frankfurt 2009
Endsleigh InsuranceTrend #3
The internet has delivered unprecedented access to information and enabled
widescale connectivity between people. And its only the start
The role of brands going forward will be
less about pushing a message and
more about engaging in the debate
Endsleigh InsuranceThe internet is rapidly changing the developed world
Information access and connectivity are exponential in growth
Social Media has overtaken porn
as the #1 activity on the Web
1 out of 8 couples married in the U.S.
last year met via social media
Years to Reach 50 million Users
Radio 38 Years
TV 13 Years
Internet 4 Years
iPod 3 Years
Facebook added 100 million users
in less than 9 months
iPhone applications hit
1 billion in 9 months
If Facebook were a country it would be
the world‟s 4th largest between the
US and Indonesia
Endsleigh Insurance
People are using the
power of the internet to
connect and drive radical
action around a range of
issues large and small
250,000 protestors signed
up via Facebook to Anti-
Farc demonstrations across
the world
Endsleigh InsuranceIran protests: Twitter was the medium of the movement
Endsleigh Insurance
Endsleigh Insurance
But change is slower when it comes to the micro-level issues that concern and frustrate people day-to-day
Endsleigh InsuranceTrend #4
Social, commercial and financial structures
built to support our economy are breaking
down
Big opportunity for brands to deepen
relationships as signposts in a changing
and unsettling world
Endsleigh InsuranceEngagement in democracy at
lowest ever levelsA whole generation is just not interested in current politics
50% of 18-24 year olds
voted in Big Brother
38% of them voted in the
2005 general election
70% were interested in the environment,
taxation and healthcare
Endsleigh Insurance
Organised religion is breaking down …
Only 26% believe in a personal god
70% do not believe Jesus was the son of God
50% never go to
church
Endsleigh Insurance
Being replaced by different forms of spirituality and fantasy
Endsleigh InsuranceThe traditional organizational model is breaking down. It’s much harder to control
How many of us blog or tweet about work?How many of us actually tell the truth?
Tesco turn their
organization charts upside down
Endsleigh InsuranceShareholder activism is increasing
How will people feel when the banks pay out billions in bonuses?
20%Increase in shareholder resolutionsBetween 2001 and 2005
Endsleigh InsuranceHere are my presentation charts
We are
more fearful (being afraid of something
increased 25% between 2001
and 2005
We are
less trusting(e.g. In businesses from 57% in
2008 to 37% in 2009)
There are
more wars(348 in 2007)
We are spending more
money on military(up 50% from 2000, to $1.2trn in
2007)
The world is a more
difficult place to
navigate
Endsleigh Insurance
What does this mean for you and your brands?
Endsleigh InsuranceA turning point
The opportunity is for brands and marketers to redefine their markets by fundamentally reassessing what and how they contribute to society
Endsleigh Insurance
The value of brands in this scenario is to create positive engagementwith employees and customers around ideas that provide solutions
Endsleigh Insurance
Credit card company?There‟s a debt crisis
There‟s a huge group of people don‟t how to budget
How can you make budgeting as easy as doing Facebook? Or gaming?
Endsleigh Insurance
Pension provider?People find it really hard to visualise what money invested today looks like as income at retirement
As a result, they‟re doing very little. What about using gaming to help people understand future scenarios and risk?
Endsleigh InsuranceRetail bank?There‟s a majority of financially unconfident people
What can you do to teach children (and adults) how to better manage their money?
Endsleigh Insurance
Insurers?Premiums continue to
rise as people consume, lose, damage and claim
more
How can you help consumers learn to protect, repair and
prolong versus replace?
Or use and track only what they consume to
reduce their premiums?
Endsleigh Insurance
All FS providers…We all know that current regulation over communications impedes understanding
How can we change this? And find new and better ways to engage people effectively?
Endsleigh InsuranceAll FS providers…We have incredible amounts of data and insight into our customers
Why can‟t we use this to guide, personalise and help?
Endsleigh Insurance
All FS providers…People are forming ever bigger, and organisedcommunities of interest
How can we find ways to tap into the greater purchasing power and specific needs they have to create completely new kinds of purchasing, borrowing and saving tools?
Endsleigh Insurance
Brands that successfully tackle these issues will create deeper connectionswhich is their social imperative
And through this create demand, loyalty and advocacy which is their commercial imperative
Endsleigh Insurance
Thank you
Get in touch with us to continue the conversation
Justin Basini Tom Farrand
[email protected] [email protected] www.pipelineideas.com (online Nov 2009) @justinbasini (Twitter) @tomfarrand (Twitter)Blog: www.blog.basini.com