How to measure brand value

In the past, marketers revolved around customers, while IT people only had to think about technology. But now, the situation has completely changed. Whether it's an app designed to foster brand-driven employee behavior or customer relationship management software that uses personalized data from a customer service center to serve customers, technology has a powerful impact on the customer experience. As a result, both types of managers find that they come together in the use of technology.

In this environment, many companies' IT and marketing departments face the same opportunities and challenges. Top management has seen information technology and corporate branding as key company assets, and both are now at the heart of strategic discussions at the highest levels. But while companies recognize the importance of these core elements, they struggle with how to measure the strategic value and performance of both.

As technology executives intervene in high-level strategic discussions about the company's brand, they are entering a new area. Their roles have expanded to designing and applying tools, monitoring the effectiveness of a company's brand strategy, and evaluating brand performance, but many of them still don't understand what a brand is all about.

A common misconception is to think of a brand as a logo, a label, or an advertisement, when in fact these are just tangible representations of the brand and are the most basic job of the marketing department. Leading global companies recognize that brands are much more than that. A brand is a set of expectations and associations derived from experience with a company, product, and service, and everyone who drinks a Coke or drives a Cadillac knows that.

Choosing a Measurement Method

A good brand measurement method is one that can be used to make actual business decisions and act upon the information obtained. The following five basic principles can help a company determine whether it has chosen the right measurements for its business strategy and positioning in the market. To make it easier to remember, these five principles can be abbreviated as "SMART":

Simple to use A useful measure is as straightforward as gathering, analyzing, and utilizing information. The key is to measure the time it takes to measure a brand. Minimize and spend enough time using information.

Meaningful This approach may not be very helpful in improving brand and company performance if it is not directly linked to the company's goals or to the company's various touchpoints with customers.

The key to an actionable measurement method is to optimize the decisions managers make, and if that doesn't work, use other effective methods.

Repeatable As far as data collection is concerned, the measurement method should be repeatable. If you deviate from the last XYZ method, you may have to start from scratch. To be comparable, i.e. apples are more effective than apples to measure brands. The measure is to be evaluated at least once or twice a year, and focus your efforts on the "tops of the tops" rather than spreading your investments in places that yield minimal returns.

There are touch points to apply the measurement method to some specific groups. Although no method is suitable for all groups, there are always one or two methods that are important for each group. Identify the touchpoints you are most interested in, and then measure accordingly.

Categories of Brand Measurements

Brand measurements generally fall into two broad categories: "Strategic metrics" and "Touch-point metrics." "Strategic Measurements" help teams assess the impact of various branding activities on the brand's overall financial performance. "Touchpoint measurement" evaluates brand performance and brand creation initiatives. When a customer visits a website or considers purchasing a product or service, a customer is closely associated with a brand.

"Touchpoint measurement" focuses on the intangible aspects of brand performance, each method has a specific purpose and is designed to understand how a brand influences purchasing decisions. Useful information can be tracked by asking the target audience some specific questions.

The real value of "Brand preference metrics" is in following up on market reactions. For example, when interviewing a company about which brand to buy a new computer, they will say that they like IBM products, but when it comes to the actual purchase, the company may choose another brand.

"Brand awareness and recognition measures" are often used together to show whether the entire marketing mix is effectively presenting what the brand is about. Brand recognition aims to let potential customers understand what a brand has to offer and whether customers can categorize a brand into the right industry, product category and competitive advantage.

High brand awareness and recognition means that companies can reduce their investment in traditional communication methods and free up resources to invest in other touchpoints. "Strategic measurement" shows the impact of brand building and management on the overall performance of the business, some methods have a clear relationship with profit and loss, others are more indirect. These measures can be expressed in dollars and cents, or by an index that has an impact on profit and loss. "Strategic measures" include a brand's price premium and customer acquisition.

A brand's price premium is one of the best ways to increase your brand's revenue. If a business sells a product or service $100 more than a comparable lower-priced product or service, the $100 increase in the price of that single sale is the brand price premium.

This method also works when comparing a company to its competitors. In this case, the main measure of the brand's price advantage or disadvantage compared to competitors, the information obtained can help the company to develop clear strategic goals to strengthen its position.

A small but targeted approach to measurement is critical to measurement success, while maintaining a balance between "strategic measurement" and "touchpoint measurement" to ensure that the customer's entire experience, from pre-purchase to post-purchase, is captured included. "Strategic measurement" should be rooted in the company's business measurement, so that it can be easily accepted and linked to senior management.

The Role of Technology

Information technology departments play an invaluable role in developing and monitoring new measurement methods, and in providing feedback to those who are implementing them.

In addition, management's chosen measurement method should be based on the company's existing capabilities. Technology managers should determine whether the technology infrastructure can provide the right people with access to the right information, and how this information can be obtained. In order to improve the decision-making process, How to interoperate with existing business data, and to ensure the smooth delivery of the final data, how can companies better encourage the sharing of critical data across the business.

Brand measurement provides tools to quickly identify where a brand is performing or not being relevant enough to the company's overall strategic goals, and helps determine whether the brand continues to add value. With the right strategic approach, companies can define direction, assess brand performance against brand strategic plans, and allocate resources more effectively for greater future growth.

Combined with other business processes and company activities, technology can play an important role in measuring brand performance, whether this role is through online research, or through Internet searches and the use of intellectual property, a powerful technology Platform and IT support can help understand the value of brand measurement. As equal partners on a strategic level, marketing and information technology can work together to measure and improve business impact and success.

About the Author: This original article was taken from the April 2002 issue of Optimize magazine with permission from CMP Media LLC. Translated by Deng Jiyi.

Jeff Smith heads the Chicago office of Prophet, a consulting firm that helps clients with brand management.