By Greg Silverman, Mar 15, 2021
The average expectancy for a brand’s lifespan is rapidly declining — many of the brands that exist today likely will not be here in 18 years.
How did successful organizations experience such a significant hit to their longevity? By failing to execute a brand strategy that addresses the four driving social analogs that no company can escape: the environment, consumers, competition, and government.
While a business plan driven by results may see short-term success, a comprehensive strategy must account not only for the past but also for the future of the market. Learn how prescriptive analytics will optimize your brand strategy — or plan to create a new brand within the next few years.
Traditionally, brand governance is viewed only as the regulations, policies, and procedures that are in place to manage a company’s reputation.
However, organizations will fail to successfully protect their franchise if they only apply governance to activities such as the review process or the consistency of promotional assets.
Marketing can no longer be approached as a problem that is solved with a linear solution. While managers would like to treat it as a simple equation (that if they spend a certain amount, their sales will increase similarly), this is an oversimplification of human behavior. This antiquated approach fails to consider the complex and ever-present nature of consumer dynamics.
To govern a brand in today's world means more than just marketing guidelines like style guides, messaging, spend, and targeting. Companies must address emerging trends and draw from the feedback loops that have been accelerated by technology and increased visibility.
Rather than abandon the complicated, the governance strategy of tomorrow is augmented with complexity.
By addressing the challenges introduced by global interconnectivity, companies can inform decisions across their departments surrounding the product, marketing, finance, and the supply chain.
Each one of these dimensions has a societal analog: competitors, consumers, the government, and the environment, respectively. All four dynamics will always exist; however, it's the responsibility of brand strategists to decide which will be the most impactful and necessary to manage.
In the Edelman Earned Brand study, nearly two-thirds of consumers worldwide will buy or boycott a brand solely because of its position on a social or political issue, which is up 13% from the year prior. If a brand takes a hands-off approach to such influences and doesn't attend to the consumer zeitgeist, they are likely to be blindsided by an issue, resulting in a revenue loss.
Brand strategists must learn and adapt quickly, exploring how feedback impacts the state of their corporate reputation.
By fostering the understanding that there is undoubtedly a connection between a brand and the four social analogs, organizations achieve the now-necessary system dynamics perspective.
Despite the evolution of analytics, matching brands and society remains elusive.
Traditional data science and historical models don't fit the complex, emerging trends of today's market. Predictive analytics only generate patterns from the past, so prediction alone won't achieve the accuracy companies need to generate forecasts for future business decisions.
Instead, by using a holistic approach and leveraging a simulation, prescriptive analytics allows brand strategists to achieve a complete understanding of their landscape.
However complex, the market your company exists in simply stems from consumers' choice between two or more alternatives. By defining the market as such and using data and research to create simulated customers that reflect your specific segments, you can then identify the most impactful factors across the customer journey.
From there, activating and investing in levers that influence consumers' choices will adjust your forecasts and guide marketing decisions.
By using prescriptive analytics, companies generate insights that pull from the social analogs to answer what-if questions and reveal patterns in human behavior.
One recent use for prescriptive analytics came into the market during the initial COVID-19 outbreak.
At the beginning of the pandemic, companies within the alcoholic beverage market were unsure of what to expect as no one could go to the bars. This disruption led to the emergence of a "do nothing" category, with estimates costing the industry $80 billion over the next two years due to a lack of on-premise availability.
To offset this effect, companies used prescriptive analytics to find their most profitable target segment in recovery: Young party-goers who would be looking to seize the opportunity to go out again.
While they also were able to find the segment most likely to see a quick return in sales, brands could also identify potential threats in consumer behavior and competitors.
Simulations showed that it was likely that older, on-premise customers would be much more likely to stay at home longer. Additionally, the emergence of the recreational cannabis industry represented a significant potential competitor.
By utilizing prescriptive analytics to model their markets, companies within the alcoholic beverage market could adjust their forecasts and optimize business decisions in near-time. Using these tools, organizations can address highly impactful social analogs. This allows them to identify and prepare for emergent risks and find an opportunity to activate prescriptive solutions and maximize revenue.
To successfully align your strategy with social analogs, you must adopt an approach that spans your organization.
A commitment to testing social analogs requires collaboration from both brand management and the C-Suite. You'll need to begin building a team and collecting the necessary data to design a customer experience and monitor the results. However, most companies lack the internal infrastructure to build and monitor a system that can do so accurately and efficiently.
Concentric has spent years developing our prescriptive analytics platform. With it, customers can account for social analogs across their operations and execute optimized strategies informed by holistic market insights.
Contact the team at Concentric today to begin integrating the powers of prescriptive analytics into your organization.