Brand Intimacy

by Mario Natarelli

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  MODEL: BRAND INTIMACY QUOTIENT

  The model culminates in a Brand Intimacy Quotient, established through our quantitative research. This is a score each brand receives indicating its performance. The Quotient is a composite measure that reflects the intensity of the relationship between consumers and brands as well as the prevalence (usage) of the brand. The higher the Quotient score, the more intense the emotional relationship with a brand. This makes it easy to compare, contrast and review results between competitors, as well as performance from previous years.

  The Quotient is a score out of 100 assigned to any brand that is part of our brand intimacy research. The score is based on the amount of intimate users a brand has, as well as the type of intimate relationships consumers have with the brand (e.g., sharing, bonding or fusing). Based on a brand’s performance against the six archetypes, each brand is assigned an “intensity of relationship” score. This score is a composite measure that takes into account the percentage of consumers at each stage of intimacy (indifference, sharing, bonding, fusing). Based on the Structural Equation Model, weights are assigned to each stage of intimacy, with fusing receiving the greatest weight on the overall intensity of relationship score, and indifference receiving the smallest weight.

  It is important to note that the Quotient provides more than a ranking of brand performance and was specifically designed to provide prescriptive guidance to marketers. We modeled data to quantify the mechanisms that drive intimacy, resulting in a guide that allows marketers to better understand which dimensions need to be leveraged to build intimacy between their brand and consumers.

  WHY OUR MODEL IS DISTINCT

  Our model was created based on the way people behave and build relationships. We’ve applied what we’ve learned from advances in neuroscience, psychology, and behavioral science to create an approach designed to be realistic and reflective of the way people process information and make decisions. Our model is not an artificial marketing construct or contrived behavioral spectrum. It is based on representative stages that people pass through in order to achieve intimacy with a product or service.

  Brand intimacy results in meaningful and reciprocal relationships that create more business growth, greater profit and higher pricing permissions. It requires companies to look at brand management from a holistic perspective. Everything a company does, including how it does things, makes a difference. Everything matters; everything moves the relationship between customer and brand closer or contributes, even in small ways, to its eventual end. Beyond pure marketing functions, this relates to product performance, IT, customer service, and operations. This approach also necessitates a thorough examination of how all stakeholders of the brand can impact and influence outcomes.

  The model is mutual, based on reciprocity. This is important because it involves the interaction between a person and a brand at each stage of the engagement. We don’t just look at how a person is behaving; we look at how a brand is performing. This gives us opportunity to provide brands with recommendations on what they can do to improve their intimacy levels. Intimacy is, after all, an evolved state; it’s not something you initially arrive at, it’s a condition that needs to be fostered and nurtured. Other models may state that a brand has an awareness or consideration issue; however, it usually does not answer “why?” Our focus on the condition of intimacy constantly reimagines and re-dimensions relationships between people and brands in more significant ways.

  Clearly, the pull of intimacy and indifference in our model is unique relative to most other branding constructs. It seems obvious and simple, yet no other model really acknowledges the fact that at any stage in brand building—something negative can happen, and if it does, the customer is at risk. We as brand builders have to understand that we can work to prevent these falls, and barring that, we can mitigate the damage and work to rebuild the relationship.

  The model gives us the ability to create a unique set of rankings that assess the emotional connections between consumers and brands. We can understand which industries have the greatest propensity toward intimacy and which are more challenged; consider gender, age and income implications; and as you have already seen, comparisons between competitors or similarly performing brands. These rich insights can provide new perspectives on established brands and help decode disruptors and upstarts alike.

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  MODEL: RANKINGS

  In our search to better understand brand intimacy—how it works, how it doesn’t work, and how it can be cultivated—our best tool is insights. Our quantitative research, which represents, to our knowledge, the most comprehensive rankings of brands based on emotion to date, helped shape and validate our entire approach. Our goal was to benchmark how emotions impact brand relationships, and further dimension which brands are most successful at creating these bonds. This high-level introduction to the rankings reveals which industries and brands are succeeding in building strong bonds with customers. It also starts to identify best performers and highlights nuances based on age, gender and income. While we know brand intimacy occurs across all segments, it is valuable to clarify distinctions and better understand the way building bonds is impacted by a variety of forces.

  Our ranking of the Top 10 Most Intimate Ranked Brands highlights the strongest performing intimate brands.

  Among our Top 10, Apple takes first place, as it does in most surveys. Apple is a dominant force in the technology sector; interestingly, Samsung, in 7th place, is the only other technology brand to make this list. Three of the other brands are in the automotive industry, highlighting this category’s high potential for creating intimacy between its brands and consumers. In addition, two very different retail brands make our list: Amazon, an online marketplace that promises a wide breadth of offerings; and its new acquisition, Whole Foods, a more upscale brick-and-mortar supermarket catering to those seeking fresh foods. We also see two distinct entertainment brands ranking: Disney, the entertainment conglomerate known for a focus on audiences, and Netflix, the streaming innovator, round out the Top 10.

  As you can see, the highest ranked brand, Apple, has a quotient score of 77. This may seem on the low side, especially when reviewing the entire top 10 list and noting that Toyota, for example, ranks 10th with a quotient score of 56.6. We believe this is because brand intimacy is a new approach, one that marketers have not been consciously trying to build on. Additionally, as we’ve mentioned, not every consumer has intimate relationships with every brand they use; in fact, it’s likely very few do at present, so we don’t imagine brands are likely to score 100 prior to implementing directed changes to their marketing strategy.

  INDUSTRIES

  Among the fifteen industries we surveyed, automotive is the strongest performing, with an average Brand Intimacy Quotient of 44.5 (the average across all of our fifteen categories is 28.7). Given the close relationship people have with their cars and motorcycles, as well as the aspirational nature of this industry, this is to be expected. Media and entertainment had a strong showing in second place, highlighting the need consumers have for comfort and distraction these days. Retail came in third, with a particularly strong performance from Amazon. Technology and telecommunications was fourth, again showcasing the important role these brands play in our lives. Insurance and investing scored on the lower side. More surprising, luxury ranked 14th out of 15 categories, suggesting premium brands are not doing as much as expected to build emotional connections. Travel was the poorest performing category, garnering an industry average quotient of 14.7. Perhaps the increasing complexity of travel and commoditized promotions has limited its appeal for U.S. consumers, but regardless, this does show us that certain industries may find it more challenging to develop intimate relationships with their customers.

  Although some brands are strong across many archetypes and stages, we did find some unique focused examples. For example, a brand may “own” a specific archetype in the hearts and minds of consumers, or it may be n
otable for its degree of sharing, bonding, or fusing customers. The following reveals some interesting examples of brand intimacy.

  WHAT DOES THIS TELL US?

  DEMOGRAPHICS

  When viewing intimate brands by age, you can see a range of insights. Apple and Amazon are both listed across all ages, highlighting their relevance from millennials to older adults. Netflix is only listed by those 18–34, Target by those 35–44 and Harley Davidson and Whole Foods by those 45–64, showcasing some specific preferences by age. Media and entertainment makes up half the list for those 18–34 years old, while retail comprises 50 percent of the top four brands among those 35–44 and 45–64 years old. Interestingly those 18–34 years old and those 35–44 years old have very similar lists, with three of the same four brands (Apple, Amazon and Disney), albeit in different orders.

  What’s notable here is that consumers below age 35 show more propensity to develop intimate relationships with brands, and appear more open to exploring those relationships, with a higher percentage in sharing. Overall, however, rates of bonding and fusing are essentially the same, suggesting age does not impact one’s ability to form and maintain intimate relationships with brands.

  GENDER

  Gender also provides interesting insights. Although men and women are similar in their overall level of intimacy with brands, the brands they identify with can be different. In general, women connect with a broad and more mature stable of brands than men do, preferring brands that are practical or relevant to their lifestyles.

  From observing the top five brands for women, we see that women have an interesting range of top brands that involve aspects of their daily life. Their top five brands include two entertainment and two retail brands. For men, two of their five top brands are automotive. While women listed Disney and Netflix for entertainment, men ranked Nintendo. Both genders had Amazon and Apple on their top five lists. A Nielsen study found that women’s most trusted brands relate to convenience or their households, while trusted brands for men included more indulgent options (which seems to echo the Brand Intimacy findings to some degree.)118

  Overall, men and women are quite similar in the archetypes they ascribe to intimate brands, but there are a few nuances. Ritual, which is when a brand is ingrained into daily actions and is an important part of someone’s daily life, plays a bigger role with women for brands in the financial services, retail, consumer goods, health and hygiene, social media and apps, fast food, and insurance and investing categories. In other words, using a brand repeatedly so that it becomes essential is a more significant indicator of intimacy for women than for men. This also aligns with the study, “Decoding the Female Consumer & Brand Loyalty,” which observed that brands with a clear and relevant purpose that aligned with women’s personal interests and values sometimes outranked brands that spend more on marketing.119 Not everything is completely practical, however; indulgence, the archetype centering on pampering and gratification, is stronger among women overall.

  When you compare women 18–34 with men of the same age, you see an even bigger distinction. Retail and entertainment (Disney and Netflix) is dominant with younger women, yet with men of the same age, entertainment (specifically gaming) dominates (with automotive remaining the other category of significance). Automotive brands are completely absent from women here. As mentioned earlier, women also lead with more practical, daily brands—brands that they count on for communication (Apple), ease of shopping (Amazon), every day purchases (Target), and to escape and unwind (like Disney/Netflix). Men are largely focused on gaming brands, which may also be for escape and comfort, although a different subset of entertainment.

  INCOME

  Based on our findings, what role does income play in brand intimacy and consumer affection? As income increases, so too does the likelihood of having emotional relationships in automotive, technology and telecommunications, and retail.

  We found quite a few differences when looking at intimate brands by income. Only Amazon was in the top 5 (interestingly in third place for both) among those making $35,000–50,000 as well as those earning $100,000–150,000. However, entertainment brands secured the #1 spot for both groups and technology the #2 spot, retail the #3. While the categories may be similar in many cases, the brands themselves are different. Apple is the technology brand of choice for the higher income group, while Samsung performs better with those making $35,000–50,000. PlayStation also ranks highest with this group, and Netflix is among their top brands, while Disney is preferred among the $100,000– 150,000 group. Here, automotive brand Ford ranks in the top five as well.

  IMPLICATIONS

  Based on extensive consumer research, the Brand Intimacy Model features four core components: the user with a strong emotional connection, archetypes, stages and a brand intimacy quotient.

  Successful intimate brands leverage up to six brand archetypes to create strong connections.

  Brand intimacy stages determine the intensity of brand-consumer relationships. The higher the stage, the greater the return (or performance).

  Top ranked intimate brands provide insights on who’s doing it well and why. Seeing brands ranked by age, gender and income further details the way distinct demographics build bonds.

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  METHODS & PRACTICE

  From the financial strength of intimate

  brands to guarding against their pitfalls,

  here we showcase our approach for

  building intimate brands and our

  future focus on software that helps

  manage and enable intimacy through

  collaboration, simulators and real-time

  tracking of emotions.

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  VALUE AND RETURN

  Could brands that have stronger bonds with their customers correlate to better business performance? The answer is definitively, yes.

  Increasingly, companies are looking for new ways to grow. Over the past decade we’ve seen that supply chains and operations have been optimized and made extremely lean. Growth via acquisition comes with its own complexities and challenges, and growth via innovation and new product development can feel like trying to catch lightning in a bottle. At the same time, executives and shareholders are overlooking ways to leverage their brand and its vast potential.

  We believe brands designed for today’s complexity have the capacity to cultivate emotional bonds with customers. We now know those bonds create a major business benefit to being an intimate brand.

  We uncovered the value of intimate brands by first compiling published financial data from the Top 10 companies in the Brand Intimacy Rankings, the Standard & Poor’s 500 and the Fortune 500. For each brand, our teams gathered the reported revenue and profit/loss for the years 2005–2015 from their annual reports and/or Form 10-Ks. Our goal was to assess which brands performed best in revenue and profit annually and also over a duration of time.

  Here is the summary of what we found:

  GREATER LONGEVITY

  Intimate brands excel over time, creating tremendous value and demonstrating performance longevity. Over the last 10 years, the revenue from top intimate brands nearly doubles the S&P and nearly triples Fortune 500.

  Keep in mind these percentage differences for larger companies translates to massive dollar amounts. Using Apple as an example, even the slimmest profit advantage of 1 percent can generate an additional $843 million swing (based on 2016 quarterly earnings.)120

  From this data, the average year-over-year growth rates for both revenue and profit over a 10-year period were calculated.

  MORE GROWTH

  We next wanted to better quantify the advantages represented by revenue and profit into annual dollar figures, which would in turn make them easier to evaluate, compare and contrast at a glance.

  In order to determine the total dollar value of brand growth, we compounded the total revenue and profit for our Top 10 Most Intimate Brands by applying each of our calculated average year-over-year growth rates f
rom the respective indices. We then compared this figure to the calculated total dollar value of growth for Standard & Poor’s 500 and Fortune 500, and took the average.

  What did our calculations reveal? Turns out, on an annual basis, top intimate ranked brands are adding $13.2 billion more profit than S&P companies. Compared to the Fortune 500 companies, intimate brands add $9.4 billion in annual profit. These are profound advantages and clearly demonstrate the business performance advantage of intimate brands.

  HIGHER PRICE RESILIENCE

  Another important area where more intimate brands outperform is on price. As consumers move up from non-intimacy to the highest stage of intimacy (fusing), their willingness to pay a premium for a brand increases. In other words, there is a strong correlation between economic equity and the levels of intimacy with a brand. You can see in our chart that, among those consumers who are not intimate with a brand, an average of 4 percent were willing to pay 20 percent more for its products, services or offerings. This steadily increases as a consumer progresses across the stages of intimacy, from sharing, to bonding, to fusing. In sharing the percentage doubles, from 4 percent to 8 percent (on average). Let’s use Apple as an example. Apple has over 700 million iPhone users worldwide.121 For the purposes of this example, let’s assume they are all in the sharing stage. That means that Apple has more than 56 million users willing to pay 20 percent more for their phones.