John Lewis sends out a conflicting message about its brand.
The Big Idea: To build a brand, it isn’t branding or sales. It is both.
John Lewis has a new “brand promise”: “For all of life’s moments”
Promoting the promise, the company talks about finding where their marketing spend gets the best ROI.
These two ideas stand in opposition.
Les Binet and Peter Field’s research shows that long-term profitability is built with a mix of brand building and sales activation.
In retail, the mix: 60/40 brand to sales.
Why does this matter: ROI is used as an all-encompassing measure of marketing success.
It is wrong!
It isn’t what you make. It is what you keep.
Profits matter.
If you only invest in sales activation:
- Year one: looks good.
- Year two: better discount, sales are down.
- Year three: the bottom falls out.
Why?
You don’t have your brand supporting your sales efforts.
Brand building activity is hard to measure. But the payoffs are tremendous:
- Customers won’t go right to price shopping you.
- Customers will pay a higher price.
- Customers will associate you with certain ideas.
Not an overnight success: Brand building is a long-term project.
Measuring the ROI in the short-term is tough.
Don’t invest in your Brand: by the time you realize that things are falling apart, it is too late to fix it.
Brand vs. Sales isn’t an either/or decision. Sales activation should pay for the brand building. Over time, brand building should boost sales and profits.