Actually a number of events and trends have conspired like a perfect storm over the last several years to put brands and their stewards on the hot seat. Recession has reduced marketing departments and dollars and undermined CMO confidence and stature. Toyota and Tiger have themselves punctured legendary brand infallibility and auras of trust. Famous Detroit name plates continue to die. The specter of a BP brand corpse now hovers. (Captain Old Spice may not be able to save the Gulf but can he restore our love and respect for brands?)
The explosion of social media channels and technologies has forced brands to play catch up with consumers and often into becoming awkward or unwanted “friends”. If Edelman’s trust index shows that we trust our friends less today, then we probably trust our brands and their leaders even less. The flowering of “personal branding” has also diluted the meaning and influence of corporate branding.
With brands and CMOs under stress, their roles called into question, companies (and even customers) now want more data, metrics and accountability. And there is no shortage of social media and brand buzz monitoring services and tools to gauge brand performance in the evolving space. There are rankings too, such as the Vitrue 100. Facebook and Twitter of course have worlds of real-time brand data and rankings to publish and they do.
A new confluence of market forces (including popular interest in charitable giving post-Haiti quake, the coming of age of the idealistic Millennials, public anger over Wall Street bonuses, the growing Sustainability movement and near universal hostility directed at BP–“Beyond Pollution”) is requiring brands to be socially “good”–hence more rankings and metrics: Brandkarma.com; PSFK Good Brands.
Of course there are already rankings for brand financial value: Interbrand; Millward Brown BrandZ; Credit Suisse Great Brands; brand equity: Equitrend; and brand word-of-mouth buzz/promoting: McKinsey; Net Promoter Score — all of which try to correlate a brand’s score with its bottom line.
Add to the rankings list now: Brand Social Currency. The inaugural study was completed earlier this year. “Building Social Currency is probably the most important investment companies can make to create value for themselves,” says Erich Joachimsthaler, Founder and CEO of Vivaldi Partners, the author of the study. He views Social Currency as a new, strategic dashboard to help corporate leaders diagnose, build and monitor the long-term heath and value of their “brand assets” in the shifting marketplace.
The methodology was developed in conjunction with MIT Sloan statisticians and Lightspeed Research. Brand Social Currency is defined as the extent to which people share the brand and/or information about the brand as part of their everyday social lives at work or at home. It is made up of six key dimensions or “levers”–Utility; Affiliation; Identity; Conversation; Advocacy; and Information. The study surveyed 1000 respondents on more than 60 brands across a dozen categories. Questions for each lever were posed to brand users. Results then rolled up into a composite Social Currency score.
Some of the Brand Social Currency results mirror trends in other studies or in other data including financials; this lends credence to the new approach. For example, in the airline category, JetBlue, Virgin, and Southwest, which rated as the the top three brands in Social Currency, are consistently the leading performers in equity, performance and loyalty studies. Starbucks, boasting a high Social Currency score for the fast-food category, traces much of its 2009-2010 sales growth to a number of recent operational, brand and social media initiatives–this momentum appears to be captured by the study. Apple’s stellar Social Currency number (no surprise) also synchs with findings from countless other studies–and recent financial results. Sunil Gupta, Professor of Marketing at Harvard Business School, says the Social Currency project “is thoughtful and provides interesting insights.”
But the new study is far from perfect. Joachimsthaler concedes that Brand Social Currency has more applicability for certain types of brands. Also, the sample universe (1000 participants) could certainly be beefed up to gain a more accurate, deep and representative read on the brands. And why not include more brands and categories? Audi, Volkswagen, Nissan and Hyundai are conspicuously absent from the car grouping. Famous names from the grocery aisle are also missing. Where is Old Spice?? The study’s viability for business-to-business markets has not been tested. And Social Currency may favor niche and premium brands (are consumers justifying their expensive purchases by giving high ratings in the survey?). Gupta argues that these brands “are likely to score higher on some components of social currency, such as affiliation and identity with the brand. It will be useful to show how mass market brands can overcome this inherent disadvantage.”
One point Joachimsthaler emphatically wants to make on the study: “Brand Social Currency is not about social media, not about buzz, not about tactics. It is so much bigger. It gets to a brand’s long-term sustainability. It’s about how customers relate to one another in the context of brands and how those brands, companies, products and people relate to customers … It’s an experiential, holistic concept that we have deconstructed and reconstructed to map to brand value.”
Philip Kotler, Professor of International Marketing at Northwestern’s
Kellogg School of Management, says “certain brands can gain a good return from investing in Social Currency; others would be wasting their money. Harley Davidson is at one extreme … but Crest toothpaste would not profit from investing in building Social Currency.”
It will be fascinating to see whether and to what extent Old Spice will smell stronger Social Currency and unit sales as a result of its recent brand investment.
Brands by the Numbers
Here are three bottom line findings you need to know on Brand Social Currency:
1. Social Currency significantly drives brand loyalty; brands with a high Social Currency command a price premium.
2. The importance of the six levers that make up Social Currency varies by brand category.
3. As expected, Toyota’s Social Currency score dropped notably between December 2009 and February 2010 (the Toyota part of the survey was run twice).