The Common Misstep That Could Be Costing Retailers $10M Annually

The value of a strong brand is undisputed among consumer-facing businesses. The runaway success of high-growth businesses such as Away, Glossier or the recently acquired Harry’s clearly demonstrates the positive bottom line impact, but they're by no means unique. As a consequence, consumer-focused brands invest billions every year to win over and retain customers.

Often informed by consumer insights and data, retailers spend time and millions of dollars to build a brand message that represents their values, resonates with customers, and gives the company a competitive advantage. However, what happens to that message as it travels through the company from the brand and marketing department to the front desk, customer service, or in-store employees? The process can play out like a game of corporate "Telephone" as the narrative dilutes, resulting in the messages being communicated by the people interacting with consumers bearing little resemblance to the origin. In partnership with InnerView, FocusVision recently surveyed 250 senior professions from midsize and large companies ($250 million and above in annual revenue) to explore the impact of brand message dilution.

Our research uncovered a staggering figure — brand inconsistency can cost retailers $10 million or more every year.

Internal Brand Dilution

While a successful marketing campaign can drive consumers to a brick-and-mortar location, half of respondents lacked confidence in store associates’ ability to accurately represent the brand story. Overall, 59 percent of respondents feel that their brand story is diluted before it reaches the consumer. Furthermore, a mere 34 percent are confident that employees throughout the organization are able to accurately and consistently communicate the company’s message. This means that the brand message delivered in-store may be different than the messaging that originally caught the shopper’s attention, which can translate to lost sales, customer confusion and unmet expectations. Nearly a third (28 percent) quantify the dilution as costing at least $10 million in annual revenue, and 24 percent of respondents estimated that it costs between $6 million to $10 million in lost revenue.

Retailers can leverage a few tactics to prevent their brand message from changing by the time it gets to the consumer-facing team. Respondents felt that peer-to-peer learning, launch events, and internal research and data gathering were the most effective ways to maintain internal alignment on brand messaging. These tactics also provide an opportunity for employees to experience the brand story and learn through experience in comparison to a less dynamic approach like emails or company literature.

The Link Between Research and Marketing

Successful companies leverage research in order to truly connect and understand everything about their customers — how they think, feel and act; what they like, need and experience. However, while 95 percent of companies have customer research, predominantly survey and focus group results, only 53 percent use customer research to inform messaging as new products and initiatives are introduced. Our findings also showed that research isn’t fully leveraged in areas like brand experience, brand messaging and product development.

Counterbalancing With Organizational Changes

To counter this, marketing and research teams should increase collaboration. While marketing teams develop the message, it’s the research teams that uncover the valuable insights to inform this message and its relevance to the consumer. Data collected by the research team can also help marketers fine-tune and adjust messaging on an ongoing basis to improve its effectiveness.

As the retail industry continues to rapidly change and to compete directly with direct-to-consumer brands, it’s important for retailers to keep in mind the factors behind messaging dilution in order to build and maintain an effective message that resonates with customers and changing preferences. This begins with marketing and research teams collaborating to understand the customer, and then crafting and testing the appropriate message. It also takes experiential training and internal communications for the entire organization to ensure a consistent delivery of a brand’s story.

Zoe Dowling is the senior vice president of research at FocusVision, a company that provides survey and customer insights software for qualitative and quantitative research.