Less than 1% of the businesses have successfully locked in long-term growth, according to new research from data, insights and consulting company Kantar. Titled “Mastering Momentum”, the study analysed 3,900 brands in its global brand equity database database over a three-year period across 58 categories and 21 countries.
Findings revealed that fewer than 6% of brands grew market share over one year. Out of those, only 6 in 10 sustained that gain over three years, and fewer than 1 in 10 improved on their initial gain. This leaves a small “One Percent Club” of brands that have mastered the art of building sales momentum in the long term, said the press release. Brands that are getting it right include Disney and Adidas.
Research conducted by Kantar last year revealed that only 52% of advertisers are confident their organisation has the right balance between long-term brand building and short-term performance marketing. The new report recommends marketers focus on three key points in the buyer life-cycle to create sustained growth. By synergising activity at each point with the others to build sales momentum, brands stand to maximise their growth potential by up to 46%.
On experience, brands can influence repeat sales by delighting existing users, who are the foundation upon which growth is built.
Next, brands can increase exposure by influencing future sales, reaching out to new potential buyers and establishing meaningful difference through compelling creative and targeted media investment. Lastly, through activation, brands can influence immediate sales by ensuring the brand and its meaningful difference come readily to mind at the point of sale.
According to Kantar’s analysis, the brands that managed to move to the needle across all three activities achieved 65 times more growth than average. The study also found that brand size significantly influences growth prospects, making it critical for businesses to balance investment across brand building and demand generation accordingly.
While sustained, long-term growth is hard, Nigel Hollis, chief global analyst at Kantar’s insights division said there is a huge opportunity for businesses that are willing to look beyond simply delivering the next quarter’s numbers. However, companies have to adopt a growth strategy appropriate for their size. Brands that tailor a growth strategy relevant to their market position have been found to outperform those that only grow penetration by an average of 45%.
Hollis added: “Small brands have little choice but to focus on increasing acquisition from competitors, while market leaders need to invest in improving the experience for existing customers, and, to a lesser degree, bringing in new category buyers. The brands that concentrate marketing investment into the moments that matter will be the ones that thrive and grow regardless of fluctuations in the global economy.”
Meanwhile, Claire Spaargaren, global brand guidance director at Kantar’s insights division noted that activities that demonstrate an immediate return tend to get more budget from marketers. They include readily available data, such as raw searches, sales and clicks, which focuses attention on the “here and now”. However, brands that understand the bigger picture and identifying reliable short-term indicators of long-term success will be able to unlock future brand growth.