Is brand cause or effect?

Over the last couple of years we have run research amongst financial professionals trying to understand how brands in the sector are doing. The key question we ask is their propensity to recommend a list of FS businesses. Its is broadly accepted that recommendation is a key indicator of business health, if people don’t think highly enough of you to recommend they aren’t likely to use you themselves.

We then ask participants a series of brand related questions of all of the brands in the survey and test their correlation with propensity to recommend. Two criteria have repeatedly come out as having the strongest correlation – Understanding of the brand (they know something about the brand beyond just the name) and Visibility (have they seen the brand communicating anywhere in the last 6 months). These were a better indicator than any other criteria, even perception of performance, that they would recommend.

Obviously, this was a great validation of our brand philosophy. But we had a niggling doubt, was this a cause or effect? Did they notice and understand the brand because they recommend it or vice versa? I have sat in many conversations with brand sceptics, who would argue it’s the former. 

We have now presented the research to people from across the industry and not once been challenged on it, bit of a relief. But in all those conversations we realised something. It doesn’t matter if its cause or effect. Fundamentally they won’t recommend you if they don’t understand you and can’t understand you if they don’t see you. So you have to make sure they do both regardless, they’re correlated so you have to try and make them happen.