The Compounding Effect of Brand
Brand marketing works so well because the effects cycle up (and down.)
“They are making pizza with a pan, and they don’t have an empty table on a Tuesday night,” fictional Marco said as he looks out the window at the Pizza Hut down the road from his unkempt storefront. “We are slaving over a wood fire oven, bringing in pepperoni directly from Italy, for what, a few walk in drunks looking to sober up.”
Sometimes the power of a brand name seems unfair, and that is because it is. A pizza from a well-loved brand like Pizza Hut tastes better because of the brand. The better tasting pizza makes the experience better, the better experience makes the brand even more well-loved.
Strong effect, cycled over time.
You can learn why brand marketing works from our previous article, but to summarise: we as humans are made to build associations and reputations to guide our interactions with objects and people in our environments. At a basic level, if we had a good experience with something or someone, we log that as an association and will be more apt to interact with that object or person in the future. If we have a bad experience or result, we won’t come back or we will approach with more caution.
This effect alone would be enough, but what makes branding so powerful is that it is a compounding effect. Positive brand associations lead to positive experiences, and positive experiences lead to more positive brand associations.
Positive brand cycle.
Customers who have positive brand associations with your business are more likely to have positive experiences. This effect builds on itself, over and over.
“When you love a brand,” says Daryl Weber (in our interview with him), “there’s something special, almost magical, that the brand gives you that other products can’t. It’s the way an athlete might be inspired to play better if they get that piece of gear from a brand they love. Or the way a musician will be inspired to play better by the “mojo” of a brand of instruments (think Stradivarius violins, Steinway pianos, or Fender guitars and basses).”
Food from your favourite pizza place not only tastes better because you like it but also because it comes from your favourite place. Wait, what? I know that can seem confusing, so let’s break it down another way; if I look your favourite pizza pie and served it to you at a restaurant you have had bad experiences with and told you it was their pizza, the food would actually taste worse. Your brand associations colour your perceptions, and perception is reality.
This effect plays out in every industry, but particularly in technology. It can be debated whether Apple has better technology or user experience design than their competitors, but the positive brand associations Apple has generated mean that people have better experiences with Apple their technology. People feel like Apple computers, phones and tablets just work, and those positive experiences they make for themselves just reinforce the brand associations Apple has made. Maybe this is why the iPhone has an insane brand loyalty (1), and 41% of Apple’s value is in its brand.
Negative brand spiral.
But this compounding experience works in the reverse as well. Customers who have negative brand associations with your business are more likely to have negative experiences in the future.
Marvel and DC comics have been in a dogfight since the 1940s, but this recently has transferred on to the big screen, and our living room TVs. They were once neck and neck; Marvel was in a bad financial position made sweetheart licensing deals with studios such as Sony and Fox for their most valuable properties and Spider-man and X-men franchises were the result. DC, being owned by Warner Brothers, left the movie executives to give their most valuable property, Batman, to a young filmmaker who was known for an action movie that was told in reverse: director Christopher Nolan. These decisions lead to the Spider-man, X-men, and Batman movie franchises to generate $4-7 billion each.
Then the two companies diverged. Marvel improved their financials enough to start Marvel Studios. This studio ran very strictly on a model: release 2 movies a year, have a 5 movie plan, make them funny, make them PG-13, and hire up and coming directors who have voices and styles to lend to the movies. This model leads to films like Iron Man, Thor, Captain America: The First Avenger, and culminated in The Avengers. All of the movies were praised by critics and fans.
Warner Brothers and DC went a different way. There was a long gap in their superhero movie schedule, and they tried to recreate the dark tone of their most successful movie: The Dark Knight. They leaned on Zach Snyder, a director with they had a previous relationship with. Man of Steel and Batman v Superman: Dawn of Justice are criticised for their dark, violent and humourless tone.
At this point, Marvel Studio movies can seemingly do no wrong in the eyes of their customers and critics. This is because they consistently produced 2 high-quality movies each year, and built an ongoing relationship with their fans. Their latest movie when this article was written, Captain America: Civil War, has 90% critical reviews and 90% in the popular vote on Rotten Tomatoes.
DC can’t catch a break. The dark tone of the movies isn’t working with the audience, and critics are hard on the movies. The last movie, Suicide Squad, garnered a 26% on Rotten Tomatoes, prompting the few fans they have to petition to shut down Rotten Tomatoes on the grounds that they are biased against DC Extended Universe films (Entertainment Weekly). The petition is ironic on multiple levels, as Warner Brother owns both DC and Rotten Tomatoes, and that Rotten Tomatoes do not write their own reviews, instead aggregating the opinions of many movie critics.
- Customers who have a positive experience with your business are more likely to have positive experiences again.
- Customers who have a negative experience with your business are more likely to have negative experiences again.
- When you invest in giving a customer a positive experience, you are investing in their experience at hand AND their experiences in the future.