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Brands with High EQ Outperform Stock Markets

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New Carat report reveals Google is the brand with the world’s highest EQ score

Brands with High EQ Outperform Stock Markets

Brands with higher emotional intelligence (EQ) are outperforming stock market indices and growing faster than competitors. This is one of the key findings from ‘Brand EQ’, a new global research report launched today by Carat, a dentsu company.

This second edition of Carat’s analysis of how emotional intelligence drives accelerated brand growth, has expanded its scope to assess 51 brands and takes in the views of 15,000 respondents across 15 markets. The original study, launched in 2020, looked at how better human understanding can drive brand performance and ranks some of the world’s most emotionally intelligent brands according to five key Brand EQ drivers: Empathy, Motivation, Self-Regulation, Self-Awareness and Social Skills.

Carat’s research showed that achieving high EQ makes clear business sense for brands, with the findings revealing an even stronger correlation between high EQ and high growth. The report found that the top 20 brand EQ performers massively outperformed in terms of the increase in shareholder value when tracked against notable indices, such as S&P 500 and the FTSE 100. In the first Brand EQ report, the gain in value was +682%, from 2010 to 2020. By extending this by another year, the gain increases to +910%. Google, Netflix and McDonald’s saw the highest shareholder value increases, demonstrating that the most emotionally intelligent brands grow faster.

Fiona Lloyd, global client and brand president, Carat, says, “Through our Brand EQ study, we found that more emotionally intelligent brands grow faster than their competitors. In our latest global findings, released today, this demonstrates this trend is only increasing and something all brands should focus on for growth.”

The second wave of research also found that brands that have been set up to create value for people score more highly on EQ. In 2020, Carat discovered successful brands have a strong sense of purpose and are connected to culture. The new research has shown even stronger evidence of this during the pandemic, with high EQ brands acting with confidence and creativity to help people adapt to new ways of living. Examples of this included Disney’s fast rollout of Disney+ to keep people entertained at home, and Mastercard’s rapid shift to digital to help shoppers and retailers adapt to new ways of living.

Importantly, the research found the biggest determinant of emotional intelligence is a brand’s Social Skills. Within this EQ driver, ‘insight and integrity’ scored highest, overtaking ‘clear and meaningful communication’ in 2020. Self-Regulation and Empathy are also now stronger drivers of overall EQ. This is not surprising, given the world has just endured a pandemic, and it further highlights the need for brands to act in an emotionally intelligent way before communicating with consumers.

Those under 25 years old were found to feel most strongly about brand EQ, with the newer companies such as Netflix and Uber scoring higher among this audience. These younger respondents were also found to equate convenience and flexibility with humanity more strongly than their older siblings and parents.

Looking at the performance of individual brands, Google comes out on top, jumping 14 places from two years ago, and thriving as the go-to brand during the pandemic. Seeing a huge leap in self-awareness, Google showed technology and innovation can have a human face, with 79% of its brand associations being deemed positive.

One of the more surprising findings from Brand EQ was Samsung’s EQ category dominance. Despite the fact Apple is the more valuable company1, Samsung ranked ten places higher in terms of emotional intelligence, taking the number two spot, up from eight in 2020. Samsung’s biggest gains came in ‘this brand behaves with honesty and integrity’, and while its devices may not sell at the premium Apple can command, it is clearly doing a brilliant job of producing products and services its customers love.

Two of the world’s biggest ecommerce brands, eBay and Amazon, prospered during the pandemic. However, their differing EQ scores point to market changes for these two retail giants. While Amazon maintained a similar position – moving from 7th to 10th place – eBay fell from 24th to 39th, arguably in line with the fall in its number of active buyers2. eBay fell across all EQ measures, but particularly in ‘knowing what it stands for’ and ‘trying hard to deliver a good experience’. In contrast, Amazon saw increases in these two areas. Amazon is actively expanding into new areas, such as online groceries, and also maintains high control over the experience.

Building on the findings from Brand EQ, Carat has devised six steps to help brands boost their emotional intelligence and in turn benefit from faster growth:

1. Be purposeful. Creating higher EQ experiences starts with having a clear sense of where brands can add value to everyday life.

2. Manage your story. Speaking with a clear voice and showing social skills are essential attributes of brands with high EQ.

3. Distinguish insight from data. Brands must convert data into meaningful insights in order to have true empathy and deliver high EQ experiences.

4. Build dynamic journeys. Motivation is a key driver of EQ, so it’s critical for brands to keep improving the experience people have with them.

5. Do good in the world. Invest in activities that promote social and environmental good. These must be authentic and connect back to purpose.

6. Build experiences through high EQ teams. High EQ environments enable marketing teams to have greater empathy with their audiences. 

Fiona adds: “We believe that for all marketers, an accelerated path to growth lays in the ability to really understand people and use media to deliver more emotionally intelligent experiences within a connected consumer journey. To achieve this, it is critical for us to continually ask the question ‘where is the value for the consumer?’ as it is within these answers we can truly design for people.”

To learn more about how emotional intelligence drives brand success and to read the full findings of the research, please download Brand EQ here.

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Carat, Wed, 15 Jun 2022 10:55:34 GMT