Intelligent leaders, like intelligent accountants, understand the impact of a brand stretches all the way from customers to the very last page of the balance sheet.
The official brand conversion rate – in unscientific terms – is the amount of hard currency that changes hands to pay for your product, services or company stock.
Few creative agencies pitching for your marketing dollar will tell you about how they can help with the third transaction type – the equity that your brand is building to boost the intangible value of your company.
According to brand value consultancy Brand Finance, brand is “a marketing related intangible asset including, but not limited to, names, terms, signs, symbols, logos and designs, or a combination of these, intended to identify goods, services or entities, or a combination of these, creating distinctive images and associations in the minds of stakeholders, thereby generating economic benefits/value”. It’s a mouthful, I know, and it still doesn’t cover it.
Apple, Google and Facebook swear by it. Their brands make up as much as 25% of their companies’ value – well, at US$151 billion at least Apple’s does – increasing the premium customers are prepared to pay to play with their wares.
Likewise, Australia’s top ten brands have a combined brand value of about US$53 billion dollars. For the past seven years, the top brand game in town was played by Woolworths, which dropped off to the second position behind Telstra (and ahead of ANZ) for the first time this year. It delivered ‘only’ US$7.7 billion in brand value to its shareholders.
Whichever way you decide to cut it, that’s a huge amount of value produced directly or indirectly by the marketing department and their creative chums that few management types admit to. Rattling off various brand names is not going to change their mind, but something else will.
Next time you’re sitting in the management meeting and your CEO is about to ‘save’ some money by cutting your marketing budget, ask yourself – how can you help their balance sheet look even better – or at least make them understand that growing the brand is your sole corporate life purpose.
Want more? Try this: Content marketing trends that will impact your 2016 budget
Brand Finance suggests connecting your brand to business performance by evaluating the financial impact of brand-based decisions and strategies. That means treating your brand a bit more in the way an accountant would by setting a baseline, using analytics to uncover drivers of demand, modelling scenarios to optimise your strategic spend and, then, improving your own internal brand by reporting on it all – in numbers!
Brand monitoring should, therefore, not mean just your performance on social media analysed in a cool agency infographics. It should actually mean improving brand performance management by integrating market research, investment, and market and financial metrics into a single insightful scorecard model to track performance and inform strategic decisions”.
In other words, there are a few simple steps to follow when building brand equity:
1. Do your brand valuation.
Audit everything from profit leavers to product pricing and brand positioning.
2. Get strategic.
Establish a brand governance process.
3. Track your brand.
Track it like there is no tomorrow. Because for the weak brand managers, tomorrow might never come.