Brand Economics Principles
1. Brand must be assessed from an integrated organizational perspective (Ops., Finance, HR, etc.)
Strata’s Brand Economics Model acknowledges all direct and indirect customer interactions beyond the efforts initiated by Marketing and Communications. It is the only way to secure a proper assessment of the financial impact and corresponding business results related to Brand.
2. External data must be incorporated for the most accurate quantification of Brand’s financial contribution.
Assessing Brand with internal data is insufficient and inaccurate. Brand Economics factors in financial, demographic, psychographic and regulatory trends; category trends and expectations; and competitive metrics to provide deeper insight into explaining where your Brand stands financially and its potential.
3. Data automation can take you so far. Customization and unbiased interpretation is still a necessity.
Many organizations use automated Marketing measurement to evaluate Brand. However, most tools evaluate tactical campaign measures like awareness, purchase intent, views/reach and conversion, and do not statistically adjust for the various media outlets’ delivery or exposure biases. These campaign measures are often misused to measure Brand health.
The Brand Economics model requires hands-on understanding of your business to make it work for you. Customization is required based on your category, business objectives, varying interactions with varying stakeholders, etc. Even within the same category, your business has unique needs that must be incorporated into a model that an automated system could not accommodate.
Furthermore, data automation leaves you to translate the findings on your own. Exposure bias is unavoidable. Brand Economics provide you with an impartial translation with implications that allow you to consider all the options.
4. If there is no financial implication the data is directional at best.
Heavy reliance on focus groups, brand tracking and U&A studies to drive Brand strategy can set you on a path that will not result in success.
For instance, a study revealed Brand awareness was low but the perception of trust was the highest in the category. The typical strategic response would be to invest more to increase Brand awareness.
One of our Brand Economics analysis revealed an awareness increase of 5% would generate approx. $6 million in incremental revenue for our client versus a 5% increase in the perception of “trust”, which would generate a negligible increase. However, an increase in the “superior service” perception score would result in $10 million in incremental revenue. Furthermore, increasing awareness was the most expensive option. Without the Brand Economics analysis, the awareness/trust strategy would have been an expensive strategy with a low ROI.
5. Math is universal.
Math allowed us to construct buildings, create electricity, fly, win wars, build computers, discover medicines, communicate and more. Using several branches of mathematics, economic theory and behavioral economics, the Brand Economics model can examine disjointed data from multiple sources and translate them into insights that increase the financial output from brand.