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Building Brands vs Building Relationships

Type: Blog

In the age of information, will the role of a brand have the same power over consumers?


That question plagued hypothesizing marketers for a while, with some guessing that consumers would leverage the availability of so much data to find the ideal product regardless of brand affinity. Others suspected the information would be so overwhelming that consumers would naturally revert to known brands. And surely anyone could pluck a case study that supported one point over another.


Or we could just take a look at the numbers: Data from over 6,000 mergers and acquisitions between 2003 and 2013 that shows us valuation trends over the decade.


Data from the Markables database shows the dollar valuation of a company’s assets, which include the trademarks and customer relationships—an ideal data set to provide answers for those hypothesizing marketers. An analysis by the Harvard Business Review showed that over ten years the trend lines are clear: brand valuations declined while customer relationship values rose.


Building Brands vs Building Relationships
Source: Harvard Business Review
So it’s less about whether customers can or will sift through information to make (or not make) decisions about brand purchases—it’s about whether or not you have a relationship with them. That relationship is quite literally more valuable than your brand.


Luckily, marketing technology now allows brands to optimize the consumer’s journey and leverage effective communications. Preference management, the active collection, maintenance and distribution of unique consumer characteristics, such as product interest, communication channel preference and frequency of communication is the best way to engage with customers and ensure that they are leading that relationship on their own terms. When they have an affinity for the brand, it’s due to their personal relationship with it, not necessarily the research and development behind the product.


Think about how your company would be valued—are relationships with your clients worth double your brand? Investing
in those relationships now has an increased ROI for your company as a whole.



About the Author: 

Eric V. Holtzclaw is  Chief Strategist  of PossibleNOW. He’s a researcher, writer, serial entrepreneur and challenger-of-conventional wisdom. His book with Wiley Publishing on consumer behavior – Laddering: Unlocking the Potential of Consumer Behavior – hit bookstores last summer. Eric helps strategically guide companies with the implementation of enterprise-wide preference management solutions.


Follow me on Twitter: @eholtzclaw | Connect on LinkedIn: Eric Holtzclaw



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