Your brand is your foundation

It was a curious scenario: the company had incorporated digital advertising into its marketing program, sales were up and the return on ad spend had increased. But brand affinity was in serious decline (brand affinity being a metric that lets market researchers make predictions about how a consumer will behave).1 In fact, a relevancy study showed their flagship brand was in the bottom third of 400 measured brands.

Speaking at the Association of National Advertisers’ (ANA) 2017 Masters of Marketing Conference, Clorox CMO Eric Reynolds recalls finding himself in a situation many corporate marketing teams are currently facing. By focusing almost entirely on short-term objectives, Reynolds says their marketing and advertising became very rational and very functional.

“In a time when we have all this data and technology…why is our brand effectiveness failing? We would argue it’s because we forgot about brands. Customers didn’t fall in love with [our] brands.”

It’s an all-too-common story. In today’s ROI-centric business environment, the value of brand building has been forgotten.

Chart: Brand Building and Sales Activation Work Over Different Timescales

BUT WHY?

In the last few years, there has been a fairly significant change in effect from long-term to short-term brand activation.

Not long ago, long-term brand building accounted for 69% of brand relevancy. But according to recent studies from Les Binet and Peter Field, that impact has been reduced to 47%, as short-term activations have risen from a 31% to a 53% majority share.

And that’s problematic. Because brand building does more than shore up brand awareness, brand preference and even, in some cases, increase sales. Brand building is critical because strong brands command a higher price and ultimately lead to long-term sales growth.

WHAT WE THINK

Brand building is the most important strategic marketing priority to ensure long-term profitability.

We understand that in today’s business environment, demonstrating ROI on marketing and advertising investments is more important than ever. While brand building efforts may not necessarily increase revenue in the short-term, doing it effectively allows companies to charge higher prices over the long-term. And increasing profits, not just sales, is the ultimate return-on-investment.

WHAT’S NEXT

Standard ROI calculations are great for short-term marketing and advertising initiatives. But measuring and assessing the impact of long-term brand building means using an alternative guide to performance.

John Kearon, CEO of System1Group, recommends measuring a brand’s ‘share of voice’ relative to its ‘share of market.’ He explains

“An established marketing principle dictates that a brand that spends above its size (and achieves excess share of voice – ESOV) can expect its market share to increase in that period. A brand that spends below its size (does not have share of voice sufficient for its size) will decline. Binet and Field indicate that, on average, across all campaigns, 0.5 percentage points of growth are achieved for ten percentage points of ESOV.” 2

For example:

  • BRAND A has a share of market at 10% and share of voice is 20%
  • Excess Share of Voice is 10% ( 20 – 10) = 10
  • The 10% ESOV means it stands to grow by 0.5 percentage points over the period

This also means brands must prioritize resources to measure, test and evaluate effectiveness of brand building campaigns over the long term.

Save yourself from the trap of “saving” labor

Like many working professionals these days, I take my lunch breaks at my workstation and use those precious 30 minutes to read through the never-ending stack of industry publications on my desk. I was flipping through a recent edition of FoodService Director today when a small line of copy on a page ad catches my eye:

“Fully cooked chicken wings are easy to prepare, saving time and labor back-of-house.”

But looking at industry headlines from the past six months will tell you that “saving” labor isn’t the issue. It’s finding and retaining labor.

So how can we better align brand and product narratives that speak to the very real labor challenges today’s operators face? It starts with a better understanding of the labor crisis facing foodservice decision makers.

WHAT’S HAPPENING

On May 4, the U.S. Labor Department reported that unemployment had reached a record low of 3.9%; the lowest rate since 2000 and a sign the job market has become even more competitive.1 And it’s putting immense pressure on foodservice operators.

In a recent conversation with Casey Saeger, Human Resources Director at Blue Plate Restaurant Company, she shares: “As a collection of community restaurants, we see the challenge of labor BOH pervasive in the Minneapolis market. We have begun to focus on investing in employee development and incorporating lifestyle perks like dining discounts to retain our employees.”

The biggest challenge operators face, across commercial and non-commercial, is the recruitment and retention of employees. And the latest turnover stats are sobering:

  • For BOH positions, virtually all restaurant companies said they are constantly understaffed in critical kitchen positions
  • For limited-service restaurants, hourly turnover was at 146.2% in August 2017
  • For full-service restaurants, hourly turnover was at 102.8% in August 20172

And for many foodservice operators, this means adopting aggressive retention strategies to prevent back-of-house staff from being poached by other restaurants or other industries.

“What we’ve seen recently is a spiraling up of cooks’ wages,” says JJ Haywood, owner of Pizza Luce in Minneapolis. “We have to meet twice a year [with managers] about who they want to protect in the kitchen.”  As the market tightens, operators are being forced to offer more competitive wages to keep kitchens staffed, which puts additional pressure on already tight margins.

WHAT WE THINK

We need to change how we talk about our products and labor benefits in marketing and advertising.

It starts with acknowledging the limitations of our products. No matter how good, products cannot “save” an operator labor when their kitchen is understaffed. Food marketers must go beyond “labor-saving” generalizations and get specific as to which challenges products can actually impact/solve.

WHAT’S NEXT

The best way to adjust your brand/product labor-solution narrative is to talk to operators in the context of their own kitchens. This dialogue will help you and your marketing team understand HOW to talk about your product’s labor benefits. For example, here are two ways we believe brands can go beyond “labor savings” to communicate specific real back-of-house solutions:

Labor Savings —> Maximizes the labor you do have

Most restaurants and non-commercial kitchens are understaffed at a time when operators are expected to do more. Operators need their people using their time in ways that increase profitability so products that simplify complicated or time-intensive preparations help maximize personnel resources.

Labor Savings —> Skill-proof quality and consistency

Culinary education programs have seen sharp declines in enrollment the last several years, which means operators are facing a serious skills gap in the kitchen. Brands should talk about their Ingredients/products that can be prepared by employees possessing any level of kitchen skills without sacrificing quality.

Just some Thought for Food™

[1] “Unemployment Rate Hits 3.9%, a Rare Low as Job Market Becomes More Competitive.” The New York Times. 4 May 2018.
[2] “Restaurant Turnover Rates on the Rise, Again.” Restaurant Business. 13 October 2017.

Questions, comments or want to learn more? Let's connect! weshouldtalk@jtmega.com

Want to receive more Thought For Food Insights?
Subscribe Now »

Recent Posts

Future Farms of America: Listen Up
Future Farms of America: Listen Up

The future of farming likely looks very different than what you might think. I recently visited a number of farms in western Minnesota where the Redwood County Farm Bureau hosted a tour that exposed us to modern agriculture production – the practices, challenges and opportunities on the horizon for the industry. This outing came on […]

Read More »

Crickets: They're What's for Dinner
Crickets: They’re What’s for Dinner

“One hundred thousand crickets…in your basement?” With this excerpt from a recent conversation, Eric Palen, a local entrepeneur who is in the business of farming insects as food, raised a lot of questions and even more eyebrows about this growing trend. After the “gross factor” fades, the facts emerge. It turns out we’ve found a […]

Read More »