Everyone talks about branding and the importance of brand strategy in the success of a business. One of the challenges business owners and corporate executives struggle with is putting a dollar amount to the return on investment associated with an organization’s brand.
Putting a number on the cost of creating a business
Pointing to upwardly rising sales figures does not really answer the question about the return the company is realizing from the money it spends creating and maintaining its brand. The money spent on name acquisition and trademark clearance, logo design, website development and other aspects of creating a brand are only part of the costs involved in branding a new company or rebranding an existing one. Marketing budgets can represent a major financial commitment for a company, so it is no wonder that companies struggle to put a value on the benefit obtained from these and other costs associated with branding.
A different way of looking at things
Most business owners will readily acknowledge the importance of branding and brand marketing in the success of their companies. A strong brand is almost universally accepted as a valuable asset, but those same business owners who believe in the importance of their brand would probably be hard-pressed to put a dollar amount on the value of it in terms of return on investment.
The challenge branding offers to the development of a return on investment model is that it is too abstract. Rising sales volume could be the result of overall market conditions benefiting all companies in a particular industry and not related to a company’s brand or to the success of its marketing strategy.
Some companies conduct surveys and other forms of market research to determine how well their brand and marketing strategies are performing. The results might offer a better understanding of consumer awareness of your brand and the message it was created to bring to the marketplace, but it is lacking the quantitative results necessary to make it useful in calculating what your brand means in terms of return on reinvestment.
Instead of analyzing your brand’s performance in terms of market share, sales volume and profits earned, an analytics approach might offer you results better suited for affixing a value to what your brand means to your company relative to the costs associated with its creation, promotion and maintenance. This approach removes the debate over the uncertainty of the value of branding by providing your business with the data it can use to accurately measure return on investment.
You need a place to start
Before you can measure you’re the performance of your brand, you need to have a point against which to compare performance. This baseline against which to compare data can be determined by gathering the information available to you about key brand markers, including:
- The position your brand has in its your market from the perspective of consumers
- The value consumers place on your brand’s ability to meet a need they have
- How well your brand performs in terms of consumer expectation
These categories tell you how well your brand is performing from the perspective of the consumers comprising your company’s target audience in your marketplace. Data collected for each of the three categories provides you with a method for determining which of them has the most effect on consumers and their response to your company and its products and services.
Analyzing data against your starting point
Arriving at a workable value for brand return on investment requires periodic collection and analysis of data measuring the performance of your brand in each of the three categories used to set your baseline performance indicator. This analysis permits you to visualize how marketing expenditures by your company influence responses in the categories essential to motivating consumer spending when compared against the baseline.
You can also use the collection of data in the baseline categories of your competitors to analyze their performance. Even more telling is a comparison of your brand’s performance against that of your competitors. The results can provide you with an insight into the brand strategies of other companies and where the money you spend on branding places you in comparison to them.
Implementing change as needed
The brand performance analysis you engage in allows you to monitor the effectiveness of your spending to get the most out of your branding and marketing budgets. The experts at YourBrand can work with you to strengthen and enhance your brand’s performance whether you are a new company or one with an existing brand that is looking to rebrand or reposition.