A recent article from the Harvard Business Review reports on a joint study from SAP, Siegel+Gale, and Shift that found major differences between digital and traditional brands. First and foremost, traditional brands aim to be in the minds of their customers while digital aimed to be a part of the lives of their customers, a loftier and more involved goal. The survey of 5,000 consumers concerning over 50 brands found two primary categories of brands: "purchase" and "usage."
Nearly every respondent (97%) said their companies are investing in AI and big data projects, the Harvard Business Review reports. While 73% of those polled said they see analytical value in the technology, only a third have achieved a data-driven corporate culture. Fearing disruption from startups, large corporations are pushing toward a data culture by mixing up management roles, but their purpose isn't always clear. In 2012, only 12% of firms reported even having appointed a chief data officer. Startups often are built with a data culture in mind, causing the large corporations lagging behind to fear major disruption.
Purchase brands focus on getting customers to “buy” a product while usage brands emphasize the need for customers to "use" a product. Usage brands spotlight advocacy, curating an experience that gets customers talking to one another. On the other hand, purchase brands are product-oriented, relying on promotions to communicate directly to their customers. Though there isn’t a perfect divide, the HBR noted that digital and traditional brands further clustered into usage and purchase brands, respectively. While older brands aimed to position themselves as a brand to look up to, digital usage brands saw value in making their customers’ lives easier.
The HBR recommends shifting toward usage brands, as customers reported willingness to pay a 7% premium and are 8% more loyal to usage brands. Usage brands also tend to develop products alongside marketing, a process which has dramatically changed the advertising landscape. Now, engagement is becoming more important than mere impressions. And that's just one impact to this sea change in branding.
Check out the article from Harvard Business Review here!
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