Consumers score Uber 67 out of 100 in brand strength vs. Lyft with just 27, according to Landor Pulse
NEW YORK, May 15, 2019 (GLOBE NEWSWIRE) -- IPOs for both Uber and Lyft underperformed, with Uber’s stock falling nearly 8 percent in Friday’s market debut, erasing $6 billion in market value, while Lyft’s shares are down almost 30 percent since its March offering. While many factors impact the success or failure of IPOs, brand strength is an important consideration, especially with two highly competitive players in the same space.
Both companies have been courting investors, customers and drivers, but which one is winning? According to the latest Landor Pulse—an analysis conducted by Landor, the global brand consultancy—Lyft has a brand strength percentile ranking of just 27 (out of 100), down from 31 in 2017. Uber’s brand strength is more than twice that at 67, but it is significantly down from last year’s 82 ranking. Brand strength is defined as a combination of brand relevance and differentiation and is a proven metric to measure the future growth potential of brands. A percentile rank score of 67 means Uber outperforms 67 percent of all 3,000 brands tracked in the BrandAsset® Valuator study. As the original ride-sharing app, Uber has clearly done the better job of differentiation with a percentile ranking of 90, compared to Lyft’s 51.
However, Lyft bests Uber on being trustworthy with a score for that specific attribute of 45, up from 21 in 2017. Uber rates just 20 on trustworthiness, slightly down from 22 in 2017, most likely the outcome of numerous issues the company has faced, ranging from adverse behavior of its drivers to alleged sexual harassment and gender discrimination by its executives. Both organizations score very high on being visionary, with rankings of 96 for Uber and 90 for Lyft, but extremely low on high quality, a meager 4 and 5, respectively.
Landor Pulse is based on data from the full-year 2018 and 2017 scores from the U.S. BrandAsset® Valuator (BAV). Data was specifically evaluated based on responses from adults aged 18 years and older. BAV is the world’s largest database of consumer brand perception data, comparing statistics for more than 3,000 brands in the United States.
“While Uber has a higher brand strength metric, it seems their issues with employees and challenges with customer experiences are obviously having an impact,” noted Thomas Ellingson, executive director at Landor. “And Lyft will need to continue focusing on their differentiation of their offering, as they have never been able to overcome Uber’s first-mover advantage. Considering both companies are unprofitable, they will need to better define their brand vision, which must include how they plan to strengthen affinity with both the drivers and riders. Lyft laid out a strong vision during their first earnings call, but they need to follow through and ensure it resonates with all their audiences. The same is true for Uber.”
Maarten Lagae, director of insights & analytics at Landor, continued: “Marketing and brand have tremendous roles in helping to create a higher valuation. In fact, brands account for more than 30 percent of the stock market value of the companies in the S&P 500 Index. Companies often don’t understand the inherent value of their brand and what an important asset it is. When a company offers an IPO, a compelling brand helps increase interest and eliminate uncertainty.”
According to an EY global study, institutional investors attribute an average of 40 percent of their IPO investment decisions to nonfinancial measures, one of which is brand strength, ranked fourth in importance. To help companies think through the branding implications when considering an IPO, Landor shares four important lessons:
1. Remember that brand equity can increase the value of the IPO. It’s generally acknowledged that brand equity, the value premium of a product or service that can be attributed to successful branding, helps drive up the value of an IPO. It’s crucial that companies define and establish their brand story, values and differentiation long before embarking on an IPO.
2. A strong brand attracts strong brands. Financial powerhouses such as Citi, Goldman Sachs, J.P. Morgan, and Morgan Stanley are more likely to associate their brands with brand leaders in their respective industries. When it comes time to represent IPO strategies and create compelling road shows, the IPO’s brand will be a formidable factor.
3. Brands need to resonate with all audiences, especially employees. A strong brand needs to mean something to myriad groups: customers, investors, partners, regulators…and employees, and in the case of Lyft and Uber, contractors. Be sure to create a culture that reflects your brand to help attract, retain and engage talent. Employees can be your strongest advocates and have high credibility with those outside the organization.
4. Take the high road. Ensure that your company makes every decision with an eye to the long-term impact. There is no substitute for ethics and integrity. Brand reputation can be destroyed with one bad act and take years to repair. A publicly held company will come under greater scrutiny than a privately held one.
For more informationCandace Boylethe10companycandace.firstname.lastname@example.org
About the Landor Pulse of Uber/Lyft IPOsUsing the BrandAsset® Valuator (BAV) data of 17,000 United States consumers from the full-year 2018 and 2017, Landor Pulse analyzed brand strength based on relevance and differentiation among adults aged 18 years and older. With more than 25 years of consumer data, BAV is the world’s largest and most enduring study of brand perceptions and performance. Its brand strength model—based on the four pillars of differentiation, relevance, esteem, and knowledge—provides unparalleled historic and predictive insights into building, managing, and tracking brand performance.
To date, BAV tracks brands in more than 50 countries with data from more than 1 million consumers. It covers 55,000+ brands across dozens of brand metrics and attitudinal questions. BAV is part of Young & Rubicam Group, a partnership of companies that includes Landor.
About LandorLandor helps its clients use brand to drive business transformation.
We believe that brand is the most vital tool to help companies meet the most pressing challenges in today’s rapidly changing world: cultural transformation, differentiated customer experience and tech-enabled innovation.
We have been using insights and imagination to help our clients grow for 76 years, across 26 offices in 19 countries, working with a broad range of world-famous brands across many industries. Clients include Barclays, Bayer, BP, Diageo, FedEx, Google, Huawei, J.P. Morgan, Kellogg’s, Kraft Heinz, P&G, Squarespace and Tata.