1. LITMUS A RESOURCE INTERACTIVE
WHITE PAPER
THE O.P.E.N.
IMPERATIVE FOR
CONSUMERS AND
BUSINESS RESULTS
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2. LITMUS THE O.P.E.N. IMPERATIVE FOR
CONSUMERS AND BUSINESS RESULTS
EXECUTIVE SUMMARY
When Resource Interactive published The OPEN Brand: When Push Comes to Pull in a
Web-Made World in 2008, the Internet had been shifting power away from brands and
toward consumers for more than a decade. But through the rapid rise of social media,
the strengthening consumer voice was amplified. Consumers were creating and sharing
content and influencing each other directly, and many brands, to regain their own influence,
began to open up to consumer involvement in their brand’s messages and offerings. Our
early recommendations that brands foster participatory relationships with consumers based
on shared values has emerged as nothing less than the bottom-up consumer imperative
of the digital age. Open branding has also become a verifiable business growth strategy.
Through our O.P.E.N. Indicator that leverages multidimensional analyses of both consumer
survey research and publically available Compound Average Revenue Growth (CAGR), we
found a statistically significant correlation between openness, likelihood to recommend
and purchase intent, and between openness and 5- and 9-year CAGRs. Measuring and
strategically optimizing a brand’s On-Demand, Personal, Engaging and Networked
(O.P.E.N.) experiential attributes demonstrably creates better business results.
INTRODUCTION: AN O.P.E.N. REVIEW
From the outset, we wanted open branding to be both philosophy and strategic framework.
As a philosophy, it enabled us to position client projects as part of the open innovation
marketplace where consumers have a recognized role in shaping new brand value including
content, products, services or experiences. As a new framework for digital marketing, it
became the common thread throughout our offerings, as it clarified the objectives for our
work based on the four attributes of an optimal open brand experience:
On-demand
Personal
Engaging
Networked
As a way to measure an open brand in the marketplace, we then developed the OPEN
Assessment, an expert heuristic that evaluates tactics in Mobile, Social and the Web on
how well they deliver On-Demand, Personal, Engaging and Networked experiences. These
baseline assessments of brands inform everything from budgets to social media marketing
plans to ecommerce upgrades.
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3. LITMUS THE O.P.E.N. IMPERATIVE FOR
CONSUMERS AND BUSINESS RESULTS
AN OPEN ASSESSMENT AL SO
PROVIDES A COMPETITIVE
ANALYSIS TO SHOW A BR AND’S
OPEN STATUS REL ATIVE TO OTHERS
IN THE RELE VANT VERTICAL.
In the past three years, the O.P.E.N. mandate has come to life in several successful campaigns
and new revenue for our clients. But a new challenge has presented itself: to move beyond
expert analysis and provide a real consumer-based metric for open branding that could
become an industry standard. Does an open brand drive consumers to further consumption
and the brand to growth? To answer these questions, we adopted a twofold approach. First,
Resource Interactive commissioned Harris Interactive and Ipsos to survey members of their
online consumer panels about how, if at all, the key elements of open brands were related to
consumer purchase intent and their likelihood to recommend brands. Second, we studied the
5-year and 9-year revenue CAGRs of our publically traded brands and analyzed their growth
over the period of time they had implemented an open brand strategy.
THE O.P.E.N. INDICATOR: CONNECTING THE DOTS
Methodology
Harris Interactive surveyed 5,300 members of its online consumer panel in February/March
2011 to obtain consumer opinions on a total of 55 consumer goods, retail and technology/
service brands.
The survey’s eight core questions (answerable on a 0-to-10 scale) were designed to reveal
the consumer’s perception of the brand relative to various O.P.E.N. experiential attributes. In
addition, each consumer rated their purchase intent and likelihood to recommend the brand.
Ultimately, we had more than 31,000 unique person-brand responses.
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4. LITMUS THE O.P.E.N. IMPERATIVE FOR
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To standardize the findings, Resource Interactive created an “O.P.E.N. Indicator” score based
on the responses to the eight core questions and then correlated that score with those for
purchase intent and likelihood to recommend.
We also then analyzed 5-year CAGR and 9-year CAGR for our publically traded brands
and performed a regression analysis against those brands’ O.P.E.N. scores.
SURVEYED BRANDS
The 55 retail, consumer goods, and technology/services brands about which consumers were
surveyed are:
Retail Brands Consumer Goods Brands Technology/Service Brands
Ace Hardware Clairol Apple
Amazon Coca-Cola AT&T
Behr Dove Dell
Benjamin Moore Fancy Feast DirectTV
Best Buy Friskies Hewlett-Packard
CVS Garnier HTC
Express Head & Shoulders Intuit
Gap Herbal Essences Microsoft
The Home Depot John Frieda Netflix
JCPenney Kellogg’s Nintendo
Kohl’s L’Oreal Verizon
The Limited Meow Mix
Lowe’s Nature Valley
Macy’s Nine Lives
Sears Pantene
Sherwin-Williams Pepsi
Target Purina Cat Chow
Victoria’s Secret Quaker
VS PINK Schick
Walgreens Selsun Blue
Walmart Smucker’s
Zappos Venus
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5. LITMUS THE O.P.E.N. IMPERATIVE FOR
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SCORING POINTS WITH CONSUMERS AND BRANDS
Thousands of consumers, 55 brands and eight questions later, did the survey results bear out
our O.P.E.N. premise?
Indeed, they did. We found there is a statistically significant relationship between a consumer’s
perception of a brand’s openness and their purchase intent (99% confidence interval).
Additionally, there is a statistically significant relationship between a consumer’s perception
of openness and their likelihood to recommend (99% confidence interval). The bottom line is
that the more open the brand, the higher the purchase intent and likelihood to recommend,
meaning an open brand strategy can lead to key business results.
The study also found that the total variance of O.P.E.N. scores across the brands evaluated to date
was 2.5 points on a 10-point scale. However, the range of purchase intent scores was 5. Therefore,
it appears that a brand’s O.P.E.N.-ness is an amplifier: a relatively small change in O.P.E.N. score
correlates to a much larger change in consumers’ purchase intent. Specifically, a one-point-
higher O.P.E.N. score correlates with a 2.5-point increase in purchase intent for consumer goods
companies, a 1.75-point increase in retail, and a 1.77-point increase in technology.
9
Retail
8 Consumer Goods
Tech
7
Purchase
6
Intent
5
4
3
3 4 5 6 7
O.P.E.N Score
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6. LITMUS THE O.P.E.N. IMPERATIVE FOR
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We then extended the analysis to see if a brand’s O.P.E.N. score was a predictor of the more
direct financial measure of revenue. Recognizing that there are factors beyond simply the
degree to which a brand is O.P.E.N. that determine top line results, we were unsure whether
the influence of O.P.E.N. would be strong enough to be picked up through the noise of these
other factors.
We looked at the 5-year CAGR and 9-year CAGR for the 28 brands included in our surveys for
which annual revenue data was available and performed a regression analysis against those
brands’ O.P.E.N. scores. The result was that we did see a statistically significant relationship
(>95% confidence) between O.P.E.N. score and revenue CAGR (p-value of .023 for the 5-year
CAGR and p-value of .020 for the 9-year CAGR).
To visualize this result, we calculated the average cumulative revenue growth by year for the
ten brands in the sample that had the highest O.P.E.N. scores and for those brands that had
the lowest O.P.E.N. scores and plotted them over time. The result is striking:
500%
450% Low O.P.E.N. Score Brands
Cumulatative Average Revenue Growth
400% High O.P.E.N. Score Brands
350%
300%
250%
200%
150%
100%
50%
0%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
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DON’T WAIT TO O.P.E.N.!
Consumer goods, retail and technology brands alike can increase the openness of their
brands and engage consumers to further consumption and great business results. In essence:
O.P.E.N. = success among consumers, both for direct transactions and for tapping into the
referral power of their extended networks.
More work is underway as we continue to build the repository of open brands. We plan to
conduct similar studies on an ongoing basis to measure brands over time. In the meantime,
with this latest evidence that the numbers add up, we encourage brands to step up and open
up. Your consumers are waiting.
Take our O.P.E.N. assessment and have your brand and your competitors added to our
Indicator database to see just how open your brand is and what you need to do to grow.
Please contact:
Melissa Dorko
Director of Business Development
614.621.2888
mdorko@resource.com
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