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As marketing professionals, we’d like to share a quick lesson in one of the fundamentals of marketing having to do with relevance, what we call being “meaningfully different.” Marketers know it’s not enough to be merely relevant to be worthy of a customer’s admiration and loyalty. Something must be relevantly different to attain this status.

This is not an emerging business school concept, especially as it relates to organizational, brand, or even personal success. It has always been a factor in whether a business succeeds or doesn’t, success being quantified as being able to solve a problem that is important to a customer better than anyone else can. How to most efficiently get from point A to point B. How to get clothes cleaner. How to give children a healthy start to the day. How to quench thirst. How to get better gas mileage. How to alleviate a headache. How to feed a puppy as opposed to an older dog. How to save money on airfare. How to store and share photographs. How to find a reputable plumber, electrician, or spouse. The best businesses, the best brands, achieved their positions because they found a gap in the marketplace that needed filling, or identified a problem that needed solving, and they did it better than their competition at a cost that makes it worthwhile doing. That is the essence of the market-based firm.

About twenty-five years ago the global communications firm, Young & Rubicam (Y&R), developed one of the most respected proprietary tools in the advertising industry for figuring out how a brand is performing relative to others in its category. Brand Asset Valuator (BAV) is a diagnostic tool that not only indicates how a brand is performing, but provides insight into what must be done to keep the brand healthy and strong (i.e., relevant) going forward.

The BAV is the world’s largest database on how consumers see brands. It purports to provide insight on how brands grow, get into trouble, and can recover. BAV collects consumer perceptions of approximately 43,000 brands along seventy-two dimensions. It reports the percentile for each of these measured brand dimensions for each of the brands compared to the entire database. For example, a single United States Postal Service (USPS) brand characteristic might score a 90, meaning survey respondents rated that characteristic higher for the USPS than for 90 percent of the other brands in the database.

As a result of extensive statistical analyses of the underlying data, BAV has found it effective to aggregate these seventy-two dimensions into four fundamental measures underlying the brand asset. These measures, referred to as “pillars,” are:

Energized Differentiation (a brand’s unique meaning with motion and direction)
Relevance (how appropriate the brand is for you)
Esteem (how you regard the brand)
Knowledge (an intimate understanding of the brand)

These pillars represent empirically grounded combinations of the seventy-two dimensions and are the basis of most generally accepted uses of the BAV data.

The relationship between differentiation and relevance provides insight into the future of the brand. More relevance than differentiation suggests the brand may be in danger of becoming a commodity. Esteem and knowledge, the other two pillars, make up a brand’s stature. A brand with a higher level of esteem than level of knowledge is a brand that enjoys a good reputation, although people may not know a lot about it. This puts the brand in a great position to convince consumers to want to know more about it. Too much knowledge and not enough esteem and consumers might say, “Hey, I know a lot about you and you’re nothing special.” In the case of leading brands, like Apple, Disney, GE, BMW, Amazon, and Google, all four pillars are strong.

BAV represents the world’s largest brand database, and it continues to evolve. In 2005, an additional dimension of Energy was recognized, which relates to forward momentum of a brand. BAV measurements have been successful in predicting stock market performance, and a theoretical portfolio has exceeded the performance of the Standard & Poor’s (S&P) index for every year in the last decade. Collaborative work with academia is ongoing to develop a worldwide valuation of a brand’s contribution to a firm’s market capitalization. The U.S. work has expanded to include over 200 categories, representing over 3,000 brands measured each quarter.

We had the opportunity to have an in-depth conversation with John Gerzema who helped developed BAV during his tenure as global chief insights officer at Y&R’s BAV Consulting. Author of several books, including Brand Bubble: The Looming Crisis in Brand Value and How to Avoid It, he is a pioneer in the use of data to identify social change and to anticipate and adapt to new trends and demands. Talking to us about BAV, he said,

“We live in an age of ‘compressed change.’ Brand building is completely different from the way it used to be. Positioning used to be planting a flag and stepping back. Now the terrain is moving at such speed and ferocity that it’s difficult to think in a static way about positioning. Erosion is critical to track. You have to be able to figure out why consumers are falling out of love with brands. Consumers don’t just want brands to be different and relevant, but to keep being different and relevant. …. Successful brands recognize this and know it’s not a place, it’s a direction. They must constantly evolve, not stand still.”

BAV indicates when a brand’s differentiation in the market is starting to lag. This is one of the early indicators that there’s trouble ahead and that a brand risks becoming irrelevant if it doesn’t shift ahead. BAV prevents myopic thinking—another dynamic in being able to stay relevant. By studying brands across categories, BAV allows you to see where your brand resides within the entire consumer experience, not just the category in which you compete. As the lines between industries and offerings continue to blur—especially in media and technology—this is a critical factor in being able to determine whether what you are promising still matters to people. It’s essential to be able to see in which competitive set your business or brand sits; in which perceptual space it exists in people’s minds.

Contributed to Branding Strategy Insider by: Allen Adamson and Joel Steckel. Excerpted from their book Shift Ahead: How The Best Companies Stay Relevant In A Fast Changing World

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