4th September 2019:
In uncertain times, what does the future have in store for our Scottish brands?
The 56 Degree Insight team are excited to share the results from our survey of 16 iconic Scottish brands - the 2019 56DI Scottish Brands Index survey. This will be an annual survey which adds a Scottish flavour to brand evaluation – a unique addition to the Scottish marketplace. Each week we will take a look at one of the key metrics of brand strength. This week our focus is on how much confidence Scots have for the future prospects of our selection of brands…
In these uncertain times, levels of economic confidence amongst both consumers and businesses are at levels not seen since the 2007 to 2009 recession. In the first half of 2019, Scottish consumers were 3 to 4 times more likely to expect the economic situation in Scotland to worsen over the next 12 months than to improve and as we approach Brexit deadline day and the prospects of a ‘no deal’ exit, concerns are increasing.
We sought to find out whether these economic concerns were reflected in Scottish consumer views on the prospects for Scottish brands.
How consumers rate the future prospects for a brand reflect their wider confidence in the company and its products and services. Confidence is important for many reasons. At worst, consumers with low levels of brand confidence will be discouraged from buying a company’s product, potential investors will be put off and other businesses such as suppliers may be reluctant to work with the company.
Numerous factors influence levels of confidence in a brand, including some of the other areas measured as part of our Scottish Brands Index study. How well is the company perceived to be performing? Do consumers feel they can trust the brand? Are they innovative? Failings in any of these areas could have a negative effect on how consumers expect the brand to perform in the future.
Consumer confidence in a brand’s future is also impacted by many external factors including the disruptive activities of competitors (e.g. think HMV v Spotify or Blockbuster v Netflix) and changes in legislation, regulations or taxes which could impact on ability to compete in the market.
Whether a brand’s behaviour meets consumer expectations in areas such as ethical and environmental practices, or quality of service, also impacts on expectations for future success. With consumer expectations always changing, businesses need to stay close to their customers and their evolving needs – no one can stand still in this fast-moving world.
And, of course, how a brand communicates plays an important part in building and maintaining confidence. People are more likely to talk about your brand if you are being bold. However, while bold communications can project confidence, if it isn’t accompanied by self-awareness it may come across as inauthentic or even arrogant. Confidence needs to be accompanied by competence or an honesty if things aren’t as good as they could be - accompanied by a clear message on the importance of making things better.
Confidence in future prospects is a key ingredient of brand strength
So, whether or not consumers are confident in a brand’s future prospects is clearly an important element in the evaluation of overall brand strength. Thus, when developing the 56 Degree Insight Scottish Brands Survey, we knew that a question on future success was a vital ingredient.
Our survey was undertaken during June and July 2019 using Kantar’s Scottish Opinion Survey – the only in-home, face-to-face omnibus survey in Scotland, and one that is representative of the Scottish adult population in terms of geography and demographics. Some 2,000 people were interviewed and asked a range of questions about a cross-section of Scottish consumer-facing brands – 16 in total:
To make survey length manageable, around 500 respondents provided their opinions about each brand. As well as being asked about each brand’s prospects for the future, respondents were also asked about brand awareness, trust, innovation, performance, likelihood to recommend and the extent to which they portrayed Scotland in a positive light. Over the course of August and September we will examine responses to all of these metrics and then finally provide our combined score to reveal the leading Scottish brand among the 16 we tested.
Brands were selected carefully; all were consumer-facing, some longer established than others and coverage spanned a range of sectors – transport, food and drink, utilities, financial services and sport. The 16 brands were key players within these sectors but obviously we were unable to cover all brands – however our selected brands represent a good cross-section of different types of brands in the Scottish marketplace.
Which brands do Scots have the most confidence in?
Once again Scotland’s food and drink brands top the ratings with over two thirds of consumers feeling confident that Walkers Shortbread, Baxters, AG Barr and Tunnocks will continue to be successful in the future. It is notable that all of these brands are very long established - they are part of Scotland’s cultural heritage, loved by many and possibly expected to be around forever! We will explore the importance of Scottishness to brand health further in a future blog.
The Scottish Football Association is at the bottom of the table with just under a quarter of Scots expecting this organisation to succeed in the future (outnumbered by the 31% who expect them to be unsuccessful). This rating is in stark contrast to that given to the Scottish Rugby Union where 56% of the population expect future success.
On pitch performance is certain to be a factor in these ratings, whilst Scotland’s rugby teams have performed well, pushing the men’s national team up the world rankings and allowing them to qualify for this month’s Rugby World Cup, the story is less positive in football as our teams struggle to qualify or progress in major tournaments.
This on pitch performance directly impacts on the population’s confidence in likely future performance and has a knock on impact on business performance in terms of revenue generation from match attendance and commercial and broadcasting partners (the most recently released financial results show a 7% YoY increase in revenue at SRU while SFA reported a 2% decline).
Clydesdale Bank receives the second lowest rating for future prospects with just 28% of Scots expecting this brand to be successful in future, a significantly less positive rating than the Bank of Scotland received (45% expect future success). While both of these financial brands are very long established, a number of factors may be impacting on expectations for their future success. Both companies have closed numerous branches across Scotland - a very visible change, likely to impact on the reputation of the brand, even amongst those who weren’t users of the branch. Bank of Scotland’s more positive rating may relate to their bigger scale, their higher level of investment in marketing, their greater market share and (as described in our previous blog) their positioning as a slightly more innovative, future thinking brand than Clydesdale.
Loganair is third bottom in our ranking, however it should be noted that while just 34% rated the airline as likely to be successful in future, only 4% expected them to be unsuccessful. In the case of this brand, a lack of experience or close awareness means most Scots are unsure of its future prospects. However, with the airline now operating under its own branding for more than a year (badged as ‘Scotland’s Airline’) and with a significant expansion in its fleet, could this be set to change?
The low positioning of the two energy brands in the ranking is also of interest. In terms of business performance SSE is by far the biggest of the companies included in our brand index – in 2018 the company reported an operating profit of nearly £1.4 billion (compared to Tunnock’s £4m and AG Barr’s £18m), yet financial performance is clearly not in the minds of most consumers when they are rating prospects for future success. It is more likely that consumers’ views on the future success of both SSE and Scottish Power are influenced by direct customer experiences and negative media coverage regarding the large numbers of customers they are losing and their poor customer service ratings (Which? Have just published their annual survey of customer service across 100 UK companies and Scottish Power came 99th, marginally ahead of Ryanair…..).
ScotRail is also below the all brands average with 44% of Scots expecting to see the brand succeed in the future. Despite investments in trains and routes, ScotRail continues to receive regular criticism over their performance. In time, investments such as the £120m redevelopment of Glasgow’s Queen Street station may change perceptions, supported by communications which allow Scots to see the efforts being made to make improvements and hopefully demonstrate that there is a light at the end of the tunnel (& not an oncoming train!!).
How consumers perceive a brand’s prospects for the future is vital, impacting on their likelihood to purchase the product or service, whether they’d advocate the brand and their overall strength of relationship with the brand.
Confidence in a brand’s future is driven by many factors, it could be a long term love for the brand and its products, making consumers feel that they can only go from strength to strength, or it may relate to more immediate experiences of their performance – whether that is on the football or rugby pitch, when travelling by rail or when enjoying a beer.
To be seen as likely to succeed, brands need to keep pace with the changing expectations of customers and remain relevant to them. That may mean investment in innovation, improving customer experience or responding to wider environmental, ethical or health trends.
And of course how brands communicate with customers plays a vital part – success breeds success with consumers drawn to confident brands that perform well and talk about their success. However, engaging with customers is even more important when things are going badly – at these times, brands need to think carefully about how to communicate with humility to help customers to understand what went wrong.
While the future is uncertain for every brand, those whose customers have confidence in their future success are the most likely to be able to weather the storm.