Is Branding Measurable? [By Liz Tan]

Often we hear about the Return on Investment (ROI) of Marketing for a new product launch or campaign, so how much do we know about Branding or if this is even regarded as significant at all. One of the ultimate excuses for not measuring a branding campaign is “Ahh, that is just another branding campaign.” And YES, you are guilty if you had just agreed to that. On the other hand, some question the effectiveness and success of a brand after a re-branding exercise, a brand launch or even a branding campaign.

Before exploring further on my take, what actually is “Return On Investment” (ROI). Aiding with reference to Investopedia, ROI is defined as a performance measure used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments. ROI measures the amount of return on an investment relative to the investment’s cost. An official formula to calculate an ROI is the benefit (or return) of an investment is divided by the cost of the investment. The result is expressed in forms of either a percentage or a ratio.

The return on investment formula


Keeping this formula in mind, we may take a step closer to our main question “Is branding measurable?” What do you think the ROI of branding is? Can it be calculated or how?

Branding is often not a small investment and is impactful on a business. It is not usually measured by traditional metrics simply because the nature of branding often as tangible as it is intangible. However, this does not imply that branding is not measurable. Short-term at sales, profits, referral numbers and leads generated after a brand launch/re-branding exercise are some of the areas that assist us to derive an outcome. Recognising branding is an ongoing process, thus these measurable metrics are assessed on a long term basis regardless of any immediate impact is present or visible.

So how do you calculate the value of branding? In one’s viewpoint, branding can be measured both qualitative and quantitative. Placing brand equity on top of our minds, very frequently ROI of branding is determined qualitatively than the dollar value rather, simply because it affects a business beyond the bottom line. How customers think and feel about the brand, how the brand fosters relationships to promote growth in time is just as important, if not more than anything that shows on a balance sheet.

One powerful consequence of all of these benefits is the impact that branding has on pricing. A strong brand enables you to set higher price points, a direct relationship which generates greater profitability. Agreed by the legendary investor Warren Buffet, this precisely explains why he is a substantial investor in five of the top 25 most valuable brands in the world. Warren knows and believes that the power of a brand is really the power to raise prices. The proof of a brand’s ability to increase the price people are willing to pay for a product has also demonstrates the value of branding in a very tangible way.

There are various ways that you can adopt to evaluate the effectiveness of your clients’ branding efforts. Let’s take a dive at some of the specific measurements.

  • Surveys

Consumer surveys targeted to specific respondents in the market, help to measure brand power as they are largely determined by four key elements: brand awareness, brand attributes and associations, perceived quality and brand loyalty. There are critical for focusing marketing efforts and tracking their impact. Conduct the survey as a baseline measurement prior to your branding initiatives and again after a period of sustained branding efforts, and then compare the results.

  • Brand Preference

It is important to measure your target audience’s awareness with purchase consideration. To contribute value to a brand, awareness without purchase consideration is a weak metric. Purchase consideration will likely lead to a decision making and subsequently, an ROI to your brand.

  • Customer Acquisition

Customer acquisition is a process of persuading a potential consumer to purchase a company’s goods or services. This include the product cost as well as the cost involved in research, marketing, and accessibility costs. In the event where a great deal of repeat business is generated, the customer acquisition rate is measured based on the increasing branding efforts, followed by the incremental value to your business through Customer Lifetime Value (CLV) calculations. A great indication of CLV is a predictive analysis of previous transaction history and various behavioural indicators which forecasts the lifetime value of an individual.

  • Google AdWords

Google AdWords is a pay-per-click service. Unlike traditional advertising, PPC ads cost money only when someone clicks on your ad which enables you to track the success of your ads. Business can thus calculate the return on investment of ads against business goals. Success can also be measured by monitoring the statistics in your account. Understanding key statistics enables you to know if your AdWords account is working for your business and whether a refining of your advertising campaigns are needed for better performance. Thus, monitor search volumes of your branded terms and look for fluctuations over time. An increase of search volumes signifies your branding efforts are paying off.

  • Net Promoter Score (NPS)

NPS is used as a foundation of a measurement framework tied to the customer journey. Based on extensive research, it has that NPS plays as a leading indicator of growth. The higher the NPS is, the better you are positioned amongst your competitors as you will likely outperform the market. Managing the organization to improve NPS will also improve one’s business performance. Hence, determine a baseline NPS and then measure changes over time.

  • Loyalty

Lastly, measure your repeat business rate or customer retention rate to determine brand loyalty.

In a nutshell, branding’s ROI can be calculated through multiple ways whether NPS, consumer surveys, brand awareness, market penetration, products per household et cetera. However, the key to the return on investment of branding is growth. Nothing is worthy without a strong brand. Supported and stated by Mark Arnold, the President of On-the-Mark Strategies consulting firm, “Your brand is the most valuable asset you have. If you don’t believe there is ROI when it comes to branding, then don’t brand your financial institution and see what happens in a few years. More than likely you’ll be a branch—of another financial institution.”

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