Are services different?

When it comes to How Brands Grow, “are services different?” is one of the most common questions asked of the Institute. The evidence shows while the loyalty metrics may differ, the Laws of Growth don’t (for example see Romaniuk 2018b, Sharp 2010). For example, service brands also grow by getting more customers, rather than cross-selling or greater customer retention.

There are however some differences between services and packaged goods such as services being less tangible and demonstrating subscription consumer behaviour. Thus, services may differ in their capacity to build the tools a brand needs to grow. This report explores the capacity of service brands to build one such tool, Distinctive Brand Assets. These are non-brand name elements that trigger the brand when the brand name is not present or noticed. This report examines Distinctive Assets for brands in service categories to identify if/how they differ from Distinctive Assets in packaged goods categories. 

Specifically, three key questions are explored:

1. What types of Distinctive Assets do service brands build; 
2. Which types of assets are more likely to have high ownership by service brands; and
3. Are service brands more or less likely to own Distinctive Assets than packaged goods brands?

Results

What types of Distinctive Assets do service brands build?

Given services do not have packs or product forms to build as assets, do they place more weight on assets such as colours, taglines and logos, or do they build alternative assets? 

This research classifies 1,385 Distinctive Assets from 52 studies across 22 countries into asset types, drawing on Ward’s (2017) framework. In each study, the list of Distinctive Assets was developed in conjunction with company marketers and expert researchers. The data spans a wide range of service categories including financial services, retailing, personal services, restaurants, transportation and tourism services. 

The results show 88% of asset types service brands build can be classified using the existing framework of asset types developed for packaged goods brands. These types include tagline, colour, logo, font, advertising, product, face (character, spokesperson or celebrity), audio, and symbol. Table 1 compares the incidence of these types of assets in service categories with their incidence in packaged goods categories, as documented by Ward (2017). Audio and Symbol asset incidence are reported as NA for packaged goods as these assets were not captured in Ward’s research, however Romaniuk (2018) has previously documented these asset types.

Table 1: Distinctive Asset types and their incidence for service and packaged good categories

Three new asset types, not previously documented, were uncovered and account for 12% of service brand assets. These are:

• Access assets (7%) – facilitate branding the service through enabling buyers to identify the brand while they access and/or experience a service. Examples (see Table 2) include employee uniforms, vehicles, or store layout (bricks & mortar or digital – assets include building architecture, artefacts, or interface design).
• Promotion assets (3%) – consist of elements used to communicate a particular offering such as new, special offer or bring attention to the price of a product (see Table 2).
• App Icons (2%) – A graphic design, often including a logo or font, used to represent a brand on smart devices (see Table 2).

Table 2: Additional Distinctive Asset types within service categories

Therefore, while the vast majority of assets built by service brands are the same as those built by packaged goods brands, there are some assets specific to services.

Service brand Distinctive Asset ownership

Research questions two and three discuss the strength of service brand’s Distinctive Assets. The key metrics for Distinctive Asset strength are Fame and Uniqueness.

Fame is the portion of category buyers who associate the correct brand with an asset. For example, a logo has 60% Fame when 60% of category buyers recall the correct brand when prompted with the logo. The higher the Fame, the better chance the brand has of being retrieved from memory. Low Fame indicates more work and investment is needed to make the asset well-known by all category buyers.

Uniqueness is the degree to which category buyers link the brand to the asset relative to other brands. For example, if the correct brand receives 60 mentions, but a competitor brand receives 20 mentions, the Uniqueness for the correct brand is 75% (60/(60+20)=0.75). The higher the Uniqueness, the fewer competitive associations consumers have in their memory to other brands for an asset.

Whilst both metrics contribute to asset strength, Fame can be increased through reaching more buyers with high-quality execution. However, Uniqueness is influenced by competitor activity and is more difficult for a brand to control. Uniqueness is the focus of this research, which provides managerial suggestions to support the development of highly Unique assets. 

If an asset is associated with more than one brand, each brand will receive its own Uniqueness score. Using the above example, the competitor brand would receive a Uniqueness score of 25% for the logo (20/(20+60) = 0.25). To understand the structure of competition for an asset beyond individual brand scores, this analysis calculates Competitive Intensity (CI)¹ . This approach follows Ward et al. (2020), drawing on a modified version of the Herfindahl-Hirschman Index to calculate the CI of responses for each Distinctive Asset to reflect the sharing between brands (Hirschman 1964). The scope of analysis is 1,216 Distinctive Assets from 192 service brands, across 12 categories. In terms of CI:

• A high score indicates a Distinctive Asset is highly or exclusively unique to one brand in category buyers’ memories, with few or no competitor links existing.
• A low score indicates a strong competitor presence in category buyers’ memories for an asset. This may be in the form of multiple brands with a low Uniqueness, or a few brands with an equally high Uniqueness.

The lower the score, the riskier it is to use the asset in a branding context, as it increases the likelihood competitors are evoked instead of, or as well as, the correct brand.

Which asset types are more likely to have high service brand ownership?

Figure 1 illustrates the CI scores, ranked from high to low ownership on average. The key findings are:

• Four asset types: Faces, App Icons, Logos, and Fonts, have very high ownership in services (CI over 80%). 
• Taglines, Promotions, and Symbols have low ownership (CI less than 50%).
• There is considerable variation within each asset type. At least one asset of each type has ownership close to 100%, but other assets with close to 0%. Therefore, ownership (%) is an indicator of relative potential, but the quality of execution in how the Distinctive Assets are used also plays an important role.

Figure 1: Average asset ownership for service brands across asset types

Are service brand Distinctive Assets more ownable than packaged goods brand assets?

Comparing results for service brand assets to benchmarks from packaged goods (see Figure 2), we find service brand assets have significantly higher ownership than packaged goods, on average. This indicates consumers notice fewer category assets or asset-building activities for service brands which is likely due to their smaller repertoire size. As a result, fewer service category buyers are pre-disposed to notice marketing activities, leading to less competition, and therefore more brand ownership in consumer memory when assets are noticed.

Taglines are the only asset type that are not significantly more ownable by service brands. Considering taglines are among the least owned asset types for both categories, the lack of significant difference is likely a reflection of poor tagline execution. For example, taglines are changed regularly by brands, prohibiting consumers from developing strong, unique associations with one brand.

Figure 2: Comparing the average ownership levels for service brand assets to packaged goods brand assets

Overall Key Findings

• Services share many Distinctive Asset types with packaged goods, and so can leverage existing empirical guidelines on how to build assets.
• There are three additional asset types used in service categories: Access assets, Promotion assets and App Icons. Given these are newly documented asset types, more research is needed to inform excellent execution for these assets.
• The higher average service brand ownership of Faces, App Icons, Logos, and Fonts poses a development opportunity for service brands who do not currently have these asset types, or are deciding on which assets to prioritise.
• Taglines have the lowest ownership, as do Colours, which is consistent with findings from packaged goods categories. This suggests the challenges faced by marketers when building these assets transcend category types. It highlights the need for more research into these commonly used, very desirable, but typically competitive assets. 

Key actions service brands can take to build Distinctive Assets

Leverage the tangible objects service brands do or could have as branding devices

Whilst many service brands may not have a packaged good that consumers buy, they do often have tangible objects associated with the service. These elements, likely product, access or promotion asset types, can be leveraged as Distinctive Assets or vehicles to build assets, and can provide diverse options of asset types service brands may use to diversify their palette. To identify these current or potential assets, consider how consumers interact with, and purchase the service. If shoppers buy both in-store and via an app, what links the two shopping environments? Do they both draw on the same colours, shapes or layout? Additionally, if the service is delivered to consumers, could the transportation vehicle become an asset? Or is there a membership card that could be used as a branding device?

Draw on advertising as a key asset building tool

Due to service brand intangibility, there are fewer opportunities for consumers to be exposed to the brand identity and Distinctive Assets. This makes advertising a very important asset-building tool. Use it well, and don’t squander opportunities through lack of prominent placement or poor co-presentation with the brand name.

Treat every touchpoint as a branding opportunity

Service brands have more opportunity to reach buyers across admin touch-points such as emails, letters, websites, membership cards, chat-boxes, and apps, than packaged goods brands have as service consumers use these touch-points to interact with, purchase and keep track of past purchases. Service brands need to seize these opportunities to display prominent branding to build and reinforce brand associations. Whilst this does mean brand logos and fonts should be easily visible across admin touch-points, there is also an opportunity to creatively reinforce other asset types. For example, everyday communications (letters, emails, messaging) may also incorporate a tagline or have prominent use of the brand colour. Alternatively, the chatbot voice on the website/app may be the voice of the brand’s character to strengthen an audio asset. 

Consistency is key, particularly with visual assets

Though it may be tempting to ‘mix it up’, keeping Distinctive Assets consistent is critical to building and reinforcing the link between the asset and brand in memory. Considering service brands have fewer opportunities for consumers to build brand memories, it makes each opportunity particularly important. Inconsistent use of assets not only forgoes the opportunity to strengthen assets, but it can create conflicting information that competes in memory. Assets should remain consistent across time and platforms. For example, keeping the colours and font the same across advertising and in-store, and keeping the architecture, store layout and employee uniforms consistent across the different locations such that a consumer can drive by and easily identify the brand.

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¹ Refer to Corporate Report 102 for more information on Competitive Intensity.

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