THE BRAND INSIDER
Brand Equity ‐ Managing by Marketing Metrics
There are several stakeholders concerned with brand equity, such as the firm, the customer, the distribution channels, media and other stakeholders like the financial markets and analysts, depending on the type of company ownership. But ultimately it is the customer who is the most critical component in defining brand equity as it is his/her choices that determine the success or failure of the company and the brand.
Customer knowledge about the brand, the perceived differences and its effects on purchase behaviour and decisions lies at the heart of brand equity. The knowledge and associations attached to the brand result in choices which have a direct impact on the brand's financial performance and shareholder value.
Brand equity is the combined measure of brand strength and consists of three sets of metrics: knowledge, preference and financial as has been explained in Asian Brand Strategy. Each of the measures under these three metrics is critical and the boardroom must ensure that the brand portfolio scores high in each of these parameters to optimize the financial outcome from strong brands.
Knowledge metrics measures a brand's awareness and associations through the many stages of recognition, aided, unaided and top of mind recall. Similarly the functional and emotional associations of a brand are important drivers of brand equity. It is crucial for brands to score high on both awareness and association attributes to establish and sustain their presence in the market place.
Preference metrics measure a brand's competitive position in the market and how it benchmarks to competing brands. Customers pass through various levels of preference towards the brand which ranges from mere awareness and familiarity to strong loyalty and recurrent revenues from the customer base. A strong brand has the brand equity to move its customers through the preference funnel towards loyalty.
Financial metrics measure a brand's monetary value through the various parameters of market share, price premium a brand commands, the revenue generation capabilities of a brand, the transaction value, the lifetime value of a brand and the rate at which brands sustains growth. These measures facilitate a company to estimate an accurate financial value of brand equity.
A comprehensive evaluation of brand equity involves measuring all the above three metrics as it ensures that the brand and its strength is valued in totality.
Perspectives on Brand Strategy
10 steps to Successful Business Branding
Business branding is a potentially strong tool for re‐aligning a business strategy and ensures that the business ‐ big or small ‐ is leveraging adequately on the un‐tapped internal and external resources. GBSH Consult believes ‐ and our experience across clients shows ‐ that a strong CEO and a dedicated management team are always seeking to raise their own bars and be change agents for their businesses backed by a strong business branding strategy. A well‐drafted and professionally managed business brand strategy and implementation plan can be a powerful component of the board room work.
GBSH Consult has identified 10 crucial steps on the way to a successful business branding strategy, and they can serve as a useful guide for any corporate branding project.
1. The CEO needs to lead the brand strategy work
The starting point for corporate branding must be the board room, which is also serving as the most important check‐point during the project. The CEO must be personally involved in the brand strategy work, and he/she must be passionate and fully buy into the idea of branding. To ensure success despite the daily and stressful routine with many duties at the same time, the CEO must be backed by a strong brand management team of senior contributors, who can facilitate a continuous development and integration of the new strategy.
2. Build your own model as not every model suits all
All companies have their own specific requirements, own sets of business values and a unique way of doing things. Therefore, even the best and most comprehensive branding models have to be tailored to these needs and requirements. Often, only a few but important adjustments are needed to align them with other similar business models and strategies in the company to create a simplified toolbox. Remember that branding is the face of a business strategy so these two areas must go hand in hand.
3. Involve your stakeholders including the customers
Who knows more about your company than the customers, the employees and many other stakeholders? This is common sense, but many companies forget these simple and easily accessible sources of valuable information for the branding strategy. A simple rule is to use 5% of the marketing budget on research and at least obtain a fair picture of the current business landscape including the current brand image among stakeholders, brand positioning and also any critical paths ahead. Simply do not forget the valuable voice of your customers in this process.
4. Advance the business vision
The business brand strategy is an excellent channel for advancing the corporate vision throughout the company. It allows the management to involve, educate and align everyone around the corporate objectives, values and future pathway. It provides a guiding star and leads everyone in the same direction. The internal efforts are at least 50% of making a business brand strategy successful.
5. Exploit new technology
Modern technology should play a part of a successful branding strategy. Technology helps to gain effectiveness and improve the competitive edge of the corporation. A well‐designed and fully updated Intranet is a must in today's working environment which has become increasingly virtual with employees working from home, from other locations and travelling across the globe to name only a few factors.
An Extranet can facilitate a much more seem less integration with strategic partners, suppliers and customers, avoid time consuming paper work and manual handling of many issues. A company website is not only a must, but rather a crucial channel for any modern business regardless of size. If the business is not accessible on the Internet, it does not exist!
The more professional the website, the better the perception among the Internet savvy modern customer. Gone are the days where corporations could get along with a business card portrayed on the Internet.
6. Empower people to become brand ambassadors
The most important asset in a corporation is its people. They do interact every day with colleagues, customers, suppliers, competitors and industry experts to name a few. But they also interact with an impressive number of people totally disconnected to the corporation in form of family members, friends, former colleagues and many others. Hence they serve as the corporations most important brand ambassadors as the word‐of‐mouth can be extremely valuable and have great impact on the overall image of the corporate brand image.
The most effective way to turn employees into brand ambassadors is to train everyone adequately in the business brand strategy (vision, values and personality etc.) and making sure they fully understand ‐ and believe! ‐ what exactly the corporation aims at being in the minds of its customers and stakeholders. Nike is a brand which is known for their efforts into educating and empowering everyone employed by the company to be strong brand ambassadors.
7. Create the right delivery system
The business brand is the face of the business strategy and basically it promises what all stakeholders should expect from the corporation. Therefore, the delivery of the right products and services with all the implications this entail should be carefully scrutinized and evaluated on performance before any corporation starts a corporate branding project.
Think of the cradle to grave concept of a lifelong customer and the value he/she will provide in such a time span. Make sure he/she is handled with outstanding care according to internal specifications and outside expectations. The moment of truth is when the brand promise is delivered well ‐ and it does not hurt if the business exceeds the customer expectation.
Singapore Airlines runs a very rigid, detailed and in‐depth description of any customer touch points with the corporation, and several resources are spend on making sure it actually does happen every time to every customer. All employees regardless of title and rank from Singapore Airlines spend a not insignificant amount of workdays being trained every year.
8. Communicate!
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Bring the corporate brand to life through a range of well‐planned, well‐executed marketing activities, and make sure the overall messages are consistent, clear and relevant to the target audiences. Make sure the various messages are concise and easy to comprehend. Do not try to communicate every single point from the business brand strategy. Instead, a selective approach will make much more impact using the same resources.
9. Measure the brand performance
A brand is accountable and so should a business brand be. How much value does it provide to the business and how instrumental is the brand in securing competitiveness? These are some of the questions which need to be answered and which the CEO will automatically seek as part of his/her commitment to run the strategy successfully.
The brand equity consists of various individually tailormade key performance indicators (including the financial brand value) and needs to be tracked regularly. A brand score card can help facilitating an overview of the brand equity and the progression as the strategy is implemented.
10. Adjust relentlessly and be ready to raise your own bar all the times
The business landscape is changing almost every day in every industry. Hence the corporation needs to evaluate and possibly adjust the corporate branding strategy on a regular basis. Obviously, a business brand should stay relevant, differentiated and consistent throughout time, so it is a crucial balance.
The basic parts of the business brand strategy like vision, identity, personality and values are not to be changed often as they are the basic components. The changes are rather small and involve the thousands of daily actions and interpersonal behaviours, which the corporations employ as part of the brand marketing efforts.
But make sure complacency does not take root in the organisation and affects the goal setting. The strong brands are the ones which are driven forward by owners whom never get tired of raising their own bars. They become their own change agents ‐ and brand champions for great brands.
