The Leading Brand Strategy Agency Dedicated to Building B2B Brands

Branding, investment and return: a new way forward

Alan Brew

What’s the ROI on branding?

If there’s one question that leaves even the most experienced brand strategists fumbling for an answer it’s that one about ROI.

It’s a good question and one that deserves a better answer than the usual squishy response of “it depends.”

For many B2B companies, especially technology companies with engineering cultures, everything has to be measurable. The value and purpose of an intangible like branding is, therefore, highly subjective without results against hard metrics that prove its worth.

Sometimes the metrics are clear. A company seeks out branding consultants at times of change. If change involves a merger or acquisition of a spin-off, the objectives are sharply defined: a new company has to be invented. Branding firms are duly appointed along with investment bankers and lawyers. The calculation of ROI is simple: it is the vector between success or otherwise of the new enterprise.

Then there’s the more discretionary, less urgent situation of a successful company that has reached a point of transition. The future, although it may be still evolving and unclear, looks very different than the past. It may have reached a growth plateau, or grown beyond its original product model; strategic acquisitions may have to be made; digital technology may be disrupting the industry; the stock price might be in the doldrums because investors don’t see a compelling vision of the future.

Any or all of these pain points puts the question of the corporate brand on the agenda. And it’s here where the conversation about branding and metrics becomes murky.

The CMO is under constant pressure to prove the value of his marketing investment. For him, investment in brand is a marketing investment and it has to move the needle on critical short-term targets – new customer acquisition, quarterly revenue goals, reduced customer churn, etc.

The CEO has a wider horizon and a longer view. While short-term wins, however tactical, are important for business momentum and confidence, they have to be incremental steps in the right direction. His captaincy will be judged by shareholders who trust him to steer a course towards a destination that ensures survival and delivers long-term value.

So the whole conversation about branding gets squeezed between the tectonic plates of strategic change and redirection and next quarter’s sales numbers.

Are they reconcilable? Until recently, the answer was “yes” with fingers crossed. The Brand Performance Platform™ is an analytics-based brand building methodology specially built for B2B brands, and now offers a new approach that takes the guesswork out of branding, delivering strategic clarity for the CEO and a high performance marketing platform for the CMO.

The platform comprises four key steps:

1. Benchmark the power of your corporate brand
2. Establish the drivers of brand preference and purchase behavior
3. Identify growth segments of customers that align with your brand
4. Position and monitor

1.  Benchmark

For any movement to be measured there has to be a starting point and an established end point. The starting point is identified by competitively benchmarking the current state of the corporate brand against key performance indicators so that subsequent movement can be measured. The indicators are:

  • Leadership (the reputation and market leadership of a brand)
  • Relationship (the value of a brand to a customer based on its ability to solve problems and the level of advocacy achieved)
  • Impact (the ability of a brand to establish differentiation throughout the customer experience based on interaction points with customers and ability to deliver ROI).

By evaluating a brand’s performance in each of these respective drivers among buyers, a company can monitor and manage movement along these strategic brand dimensions, thereby becoming a critical performance indicator.

2. Establish the drivers

Employing the same data set, we identify a bank of attributes that determine buyer behavior, rank them and plot performance of competitive brands against each attribute along with the client brand. This enables us to determine which brand attributes influence behavior and how various brands are performing with buyers.


3. Identify growth segments

The attributes are clustered into factors and distributed on a map to create a market landscape. A competitive set of brands are placed on the map according to their strength and performance against those factors. The customer universe is then segmented using Firmographics -- a set of characteristics of organizations which are most likely to spend money on your product or services -- to identify the most viable groups of customers with reach of your brand, and how best to reach them.

4. Position and monitor

With this clear view of the customer and brand landscape mapped with precision, we can then scientifically position brands for optimal growth, and monitor their movement against the established indicators to give CEOs, CMOs and brand leaders a clear view of progress and effectiveness against strategy and marketing investment.

The Brand Performance Platform™ has been validated across vertical industries for driving business results and applied with success for clients such as Huawei, Elsevier, Peer 1 Hosting, HP, Cisco, Pegasystems and ZS. For more information download our Paper: http://brandingbusiness.com/resources/brand-performance-platform

 

Comments

  • November 20, 2015 3:16 PM
    If you want to make an excellent branding investment, go with branded entertainment. Target millennials. By 2018 they will have $3 trillion in buying power and they share 9 out of 10 videos posted to their social media pages if they are engaged by it. Lexicon Studios specializes in reaching these millennials.
  • October 13, 2015 9:54 AM
    Great insights, Alan. I think one of the main reasons it is so difficult for brand strategists such as yourself to point to hard data to support the effectiveness of a corporate branding initiative is that clients like me are loathe to spend the time and money on adequately tracking against key metrics once the branding process is completed. Once we've expended the time and energy to advocate for the resources to review, refine, and refresh the brand--and gone through the rigors of a proper rebranding effort--we're too focused on executing and moving forward to go through the academic exercise. It's too bad, really, but I get why it happens.
  • April 10, 2015 12:40 AM
    It's probably implicit in what you are saying, but I don't see the words 'brand preference'? I always return to the Coke versus Pepsi blind versus branded product test ...... when consumers taste Pepsi and Coke unbranded, 51% said they preferred the taste of Pepsi, 44% said they preferred Coke. When the branding is added , 23% said they preferred the taste of Pepsi, 65% said they preferred the taste of Coke! The only thing that accounts for this difference is brand preference .... a 42% level of preference for Coke ..... I believe the very well established brand valuation methodology of Interbrand, at its heart, uses this simple but profound measurement method ...... what is the premium driven by this brand ....all the other drivers and metrics come next ..... I developed a corporate reputation measurement and management tool at one point, when I worked in Corporate PR and Consulting for Bell Pottinger - again, at the heart of the system was the idea of the corporate brand premium, or brand power ..... Happy to discuss further! Kate