Daydreaming has huge economic benefit. It creates and sustains margin and doubles shareholder value. So it follows we need more, not less of these so-called fluffy people – right at the very heart of the organisation where margin and shareholder value are created.
Eddie Hart was my dream chief executive. He barged into my office one day when I worked in marketing demanding to know: “Why, whenever I walk past your door do I never see your feet on your desk?”
I was in my mid-20s. He was a really daunting bloke. I had no idea where his line of thinking was going.
He followed that with: “You’re infinitely more value to us if you spend your time with your feet up daydreaming. That’s what I really pay you for.”
I’m horrified by how much the pendulum has swung in the opposite direction. Frankly, I’ve had a gutful of hearing that marketing folk don’t belong at the boardroom table. That they’re “fluffy”. Dreamers. That today’s marketers need to be far more left-brained (if you subscribe to left brain/right brain).
This is utter nonsense.
I’ve had the great fortune to work with truly inspirational marketers – like Austin McGhie at Kellogg’s, Paul O’Brien at Warner-Lambert, David Thomason at MLA, Peter Bush at McDonald’s, Don Meij at Domino’s and Joe Saad (now running Weight Watchers). The analytical stuff – piece of cake. Strength of character – there in spades. Far more importantly, they had courage, empathy, fertile imaginations and faith in their own gut-feel – damn good right brains.
Brand-rich firms valued four times more
Stay with me a wee bit a longer, please, and you’ll see where I’m going with this.
A few years back, the Financial Times reported that: “the average British and American company is valued by the stockmarket at about twice net balance sheets. Brand-rich companies are valued by the stockmarket at four times net assets.”
Let me explain why this is so. (It’s a proof that applies to all kinds of businesses from the very large to those that are not yet that large.)
Like many of my esteemed marketing colleagues, I too am often suspected of being fluffy. When I start to talk about emotional bonding I can see (or at least I imagine I see) eyes rolling. I work in a very successful advertising agency. I know what they’re thinking – all this emotional stuff is just touchy-feely creative waffle.
This couldn’t be further from the truth.
The emotional stuff has massive economic benefit – to businesses large and small. I intend to prove this for you drawing on IP and data from Millward-Brown, the highly respected global research company. They have done this for most brands, in most categories, in most countries over about 20 years. In other words, you can trust their findings.
For illustration, let’s take the grocery stores category in Australia and refer to the graphs below, drawn from their Millward-Brown’s BrandZ study. (I chose grocery because it spans all grocery from small corner stores to the Woolworths/Coles behemoths. The story is similar for any type of business or category.)
Here’s how to make sense of the graphs.
The left pyramid represents the average grocery store – using clever mathematics to remove the effect of size so we can compare all stores.
The bottom slice shows us what proportion of the 400-person sample knows a fair bit about the average store. We are most interested in how well we carry people from this bottom slice all the way to the top. People who get all the way to the top know a fair bit about the brand/chain/store. And they love it. To the extent they’d recommend it to friends and forgive it when it make a mistake.
Now focus on the right-hand pyramid. That shows us what proportion of their total grocery buying will go to a particular brand. Notice that a grocer who only makes it to the bottom slice i.e. “I know a fair bit about you” can expect 13 per cent share of wallet. Whereas a loved grocer that carries folk all the way to the top can expect to get 52 per cent of a fan’s grocery dollars.
That is a four-times multiplier. It comes from the difference between base-level product or service and a fully developed, likeable brand.
You see the crucial difference between a product (the rational/functional bit we deliver) and a brand (rational + emotional) is the fluffy stuff. The intangible, non-rational – sometimes will-o’-the-wisp – component doesn’t come from analytical thinking but from creativity, imagination, intuition, empathy. The fluffy stuff has huge economic benefit. It creates and sustains margin and doubles shareholder value. So it follows we need more, not less of these so-called “fluffy” people – right at the very heart of the organisation where margin and shareholder value are created.
It’s time for the pendulum to swing back the other way. Let’s identify, nurture and promote the dreamers – they will create value for the left-brainers to count.
*Original Article: http://www.brw.com.au/p/marketing/mark_good_marketers_need_ogilvy_M3kD4Wr8rNprAnKqr20txL