Brand Measurement Myths
1) Brand does not contribute to revenue.
Incorrect, Brand’s contribution ranges from 34-74% of the S&P 500’s value.
Source: 2017 Ocean Tomo, MASB, Strata Insights Study of Global Brand Value Estimates and Strata Insights ongoing Study of disclosed Intangibles in M&A + Client Engagements.
2) Our Brand awareness and like-ability scores are always high (top two box) so we don’t need new metrics.
Ever dig down to see what’s below the top two box scores? High awareness and likeability don’t necessarily translate to high growth or profits. You can learn a lot more by connecting those scores to behavioral and financial metrics to get the true financial contribution of your Brand.
3) We don’t have the data or budget for this type of exploration.
Financial Brand data is relevant to your entire organization and to its financial success. Much like corporate financial audits, a financial Brand assessment is a necessary organizational investment with a tangible ROI.
One client invested $200K in research and analytics which modeled the financial advantage or risk of pursuing a specific business strategy. The risk to the business was a decline of between $1.8 and $3 billion. An exceptional investment in risk mitigation. You do the math.
4) We’re B2B so Brand is less important.
B2B companies with Brands that are perceived as strong generate a higher EBIT margin than other companies (McKinsey, 2014).
In the US, Brand strength and perception are more important (18%) than sales efforts (17%) in the purchase decision process (Forbes, 2013).
Buyers are usually 60% of the way through the sales process before they talk to a sales representative, according to research from Google and CEB.
5) We don’t have the time.
Investing time in dissecting your financial Brand performance is paramount to financial success. By looking at all aspects of the business that impact Brand, you can shift your organization’s mentality to view it as an investment with a distinct ROI, not an expense. You are also able to provide a solid financial rationale and prediction of outcomes. Without investing in Financial Brand Measurement, strategic decisions could prove costly and/or ineffective:
- the initiative is underfunded
- the wrong positioning or focus is on less profitable Brand drivers
- the initiative negatively impacts other business lines, etc.
- other areas of the organization are delivering weak Brand experiences that no amount of Marketing can address or overcome
6) We’ve cut our Brand/Marketing budgets so there’s no point measuring Brand.
As we said earlier, Brand is more than Marketing. Every division impacts its performance metrics and financial contribution. In the case of diminished Marketing investment, it is even more important to understand the value of what is being invested and how that impacts your brand’s earning power.
Furthermore, without financial insight into Brand, it is difficult to build a case for budget support down the road. You need to keep tabs on your Brand as the marketplace evolves.
7) Other divisions, like Finance, do not impact Brand.
Many people still cling to the belief that Marketing is solely responsible for Brand development and maintenance. The truth is that every business unit impacts Brand. Let’s look at an example.
Operations and Finance decide to over-book flights for cost savings. This decision led to social media exploding about a passenger being injured while being physically removed from the plane. With Brand Economics, the airline would have been able to calculate the financial risk to the Brand and the long-term revenue erosion.
At Strata Insights, we scrutinize every aspect of your business that has any impact on Brand.