Creating successful brands and taking them to the global market is one of the biggest challenges we face in Portugal. (…) A data-driven brand is not a silver bullet, but it is the smartest way to mitigate risk and costs for successful entry into international markets.
The successful cases are, unfortunately, few and limited to a few sectors. There is no doubt that “know-how” exists in our country, but a mentality and even a business culture leads us to look for short-term solutions necessarily of lower value. When confronted with the question and the idea that the size of the country justifies our “aversion” to creating brands, I always answer the same way: Switzerland – has less population than Portugal, less than half of its territory, and has more than 300 international brands in sectors as diverse as food, industry or luxury goods.
The last decade in Portugal has led many companies to make very large investments in information technologies and today, all companies of significant size have an ERP at the base of their information system. But what do we do with these systems? Two things: We invoice and pay taxes. There is an almost monolithic view of the existence of these platforms as if everything in business life comes down to accounting and taxes. These significant business investments have to serve for more, for much more.
The deficit of Portuguese international brands
It is not news that our country has immense difficulty in creating reputable brands with international visibility. Our country is known for many products and for being a high-quality manufacturer. We have several sectors where what we produce is internationally known, but we have few, very few, Portuguese brands that have managed to succeed internationally. Some sectors are eminently exporters, such as footwear or textiles, where the vast majority of exported products are sold under third-party brands, thus losing much of the product’s added value as it does not have a brand. However, the problem is not limited to marketing and branding. In sectors that require investments in research and development or more complex innovation programs, there are clear difficulties in accessing financial and technological resources.
The digital transformation process
Many companies are in the digital transformation process, either by creating their digital ecosystem or by adopting new work practices and even new business models that the pandemic has forced. Many of these models were made reactively. A set of mitigation measures was needed instead of a set of value-creation strategies due to the need imposed by the pandemic. This is not about semantics; this is about thinking and setting priorities.
The creation of companies’ digital ecosystems was a result of the practical implications of this process, which should have been done to increase the business’s value. Still, it was instead built to provide quick responses to the same business model. These systems, which should also have been built to be able to integrate different sources, cannot live on internal data alone, with the risk of quickly becoming redundant and leading to incorrect decisions. One of the most common fallacies and pitfalls of CRM systems is that the knowledge of current customers is enormous and deep. But making decisions only based on what our controllable reality is, only guarantees the maintenance of current customers/consumers, and never the conquest of new ones. A reliable data ecosystem must be able to balance internal knowledge with external knowledge.
What is a data-driven brand?
Data integration in brand management is not something new. The novelty derives from the fact that we now have data at the center of decisions, whether they be the development of a new product, the creation of relevant innovation, or the decision to invest in communication. It’s the end of “I consider” and “I think that”. The relevance of this decision-making and brand development model is essential for successful international expansion.
“How have you been deciding which markets to enter? And which segments to explore? And the communication to be done? And the price of the product?”. The answer to the key questions will no longer be intuitive and based on sensitivity but will become a systematic process with greater certainty.
A data-driven brand is not a silver bullet, but it is the smartest way to mitigate risk and costs for successful entry into international markets.
Is this what we need?
Everything has to start with a data culture. We do not want to have data to help us decide one day and have the “CEO’s mother-in-law” give her opinion the next day. And this culture has to positively contaminate the entire organization. Data is the foundation of information and all are important, no matter where they come from. The search for and achievement of efficiency is often achieved through seemingly irrelevant data, but which, when combined with others, manage to show us solutions that, in a piecemeal way, we would not be able to achieve.
Then we need a tool that can collect this data from different sources. Many here will say, “But that costs a fortune!”. Well, not anymore! There are solutions on the market capable of serving national SMEs at prices that are accessible to most of them. And if we consider efficiency, sales, and innovation gains, the project could easily be self-sustaining.
Finally, we need someone who knows how to work with this platform, people duly trained and qualified to do so. But these people are expensive, some will say. What is the cost of a company, without knowledge?
What are the advantages of a data-driven brand?
The existence of reliable, abundant, and frequent data allows the brand to quickly start observing patterns and verifying trends. This has, in terms of marketing, enormous value. These patterns and trends help fine-tune products and find unserved segments. Or if you like, in other words, consumer needs are beginning to be clearer and more defined, which allows all kinds of adjustments, and, above all, a substantial decrease in the “time to market” of many projects.
By itself, this would be the end of a happy story for many companies. For a data-driven brand, this is just the beginning. Through more informed decisions and adjustments to what we are looking for, we will be able, at the same speed, to find new models for personalizing the customer experience. This personalization always brings more knowledge of the client and a greater adjustment to his needs.
With customization and adjustment to customer needs, price loses relevance as a choice factor, which allows the brand to increase its value and, consequently, its price. We must never forget that there are no expensive brands, there are many where the consumer cannot understand their real value.
The next phase is the efficiency phase. We already know our consumers and have already personalized the offer. Our pricing has been improved because our value has been understood. Knowledge of the ecosystem is now starting to allow us to optimize other decisions. Do we need to invest so much in this market? Is the stock level the most adjusted? Are we producing the right sizes and colors? This is the time to seek efficiency at all levels, from production to logistics, from sales to communication. It is also at this stage that new business models and concepts of disruptive innovation begin to emerge. They arise from deep knowledge of the three dimensions: The consumer, the market, and the organization. Only with this deep and well-structured knowledge will we be able to launch other products, concepts, and services that will follow in the footsteps of success.
Portugal, given the size of its internal market, needs to turn more and more to the outside world. Due to the size of our companies, our level of investment is reduced and competition in markets with higher added value and with standards different from ours can be risky and complex.
The assumption that brand management is entirely data-driven mitigates the risk and exposure of the company and brand to failure and failure. If “knowing how to do it” is undoubtedly very important, “knowing who to do it for” is no less important. It’s time for us to stop doing what others ask us to do and start doing what they want. And with a good Portuguese brand!
Opinion article originally published in MaisM.
