Are There Any Niche Brands with Crazy Loyalty?
I mean, we hear about it all the time. There’s a pervasive story, a broad belief — dare I say an archetype — of the small, niche brand with the super-loyal customers.
It seems to be extra extra pervasive in the natural foods world. Not sure why. Maybe because health nuts are also supposed to be brand nuts?
But there’s a problem with the story: the data don’t back it up.
How Does Market Share Influence Profits?
First of all, share and profit don’t link all the time. They can move quite independently.
But when they do link, ‘market power’ is HALF of the connection. This is primarily the ability to charge a higher price — thus increase profits (natch). But it’s also from getting better prices from suppliers.
Are People Actually Brand "Loyal"?
Bain & Co got some panel purchase data from Kantar in the UK. It covered everything from beer to clothes to hotels to jewellery.
And in every category, most people bought from a “repertoire” of brands over the year or so, not just their favorite. You know: a little Cadbury chocolate, but also some Dove, and maybe some Tony’s too. A Coach clutch,but a Burberry one too.
How Valuable is Your “Brand”?
It’s gotta be more than just your revenue, or your market cap. But how do you measure it? Is it $10M or $10B?
Interbrand just released their latest list of the best global brands. Their formula is “financial performance” + “the role the brand plays in purchase decisions” + “the brand’s competitive strength and its ability to create loyalty.” It’s a secret sauce, but it does meet ISO standards.
BrandZ and Brand Finance have their own methods. Jonathan Knowles was kind enough to gather the data for all three.
Overall, they mostly agree on the ranking of the world’s strongest brands. Whew.
But they disagree quite a bit on the dollar values.
Do Heavy Buyers Stay Heavy?
The TL;DR: not so much.
In a classic study,The NPD Group measured the purchase frequencies of 2,261 consumers across 27 brands in both CPG and non-cpg categories. Then they came back a year later to see how much folks were stll buying.
Is Advertising a "Tax for Being Unremarkable"?
If this is true, why is Amazon — clearly a pretty remarkable company, a TECH company, and seemingly ubiquitous — why is it the largest advertiser in the US today, spending $16.9Bn last year on ads?