perspective

How to quantify the impact of your brand

Your business benefits from having a strong brand, yet CMOs often find it challenging to convey the importance of branding to their CEO counterparts. They need a way to track and attribute brand performance with business outcomes.

Karine Bailly is the VP of Brand Experience at Long Dash. She formerly led a team of brand and content strategists at the branding agency CHIEF.

May 22, 2024

Is your brand returning measurable results for your business? In a world where metrics reign supreme and bottom lines dictate decisions, brand and marketing leaders must be prepared to answer this question.

And yet, it’s historically been challenging to measure the seemingly subjective impact of branding, even while we all intellectually know that brands have tremendous power to inspire customer and employee loyalty, unlock price premiums, drive growth, and increase valuation—among other outcomes. This dissonance has left businesses with unrealized potential, just as it’s led to important disconnects among members of the C-suite.

This typical CMO and CEO relationship is a prime example. Both share the common goal of driving business growth, but their perspectives on how to achieve this goal may differ. This disconnect can sometimes result in strained relationships or, as Forbes notes, “The lack of financially valid and agreed upon standards for evaluating brands is a big underlying reason why 78% of CMOs have historically suffered with a credibility gap with CEOs, boards, and CFOs.”

With CMOs already on their heels, it makes sense that they often struggle to make the case for sustained or incremental budgets for brand development, evolution, or marketing efforts. And it is resoundingly true that this ultimately stymies growth.

Strong brands give companies a leg up, so why is it so hard to measure brand value?

As a leading voice on the best global brands, Interbrand is prolific about the fact that companies with strong brands consistently outperform their competitors in terms of shareholder returns. For example, between 2000 and 2018, the S&P 500 companies with the strongest brands generated an average annualized return of 15.1%, compared to 6.5% for the overall index. It’s a testament to a brand’s ability to influence key indicators of business health, from revenue growth and market share to customer acquisition and retention.

A strong brand can also command premium pricing, attract top talent, and insulate a company from competitive threats. Research by McKinsey & Company found that brands perceived as strong leaders in their industries enjoy a price premium of up to 20% compared to their competitors. Similarly, a study by Glassdoor revealed that job seekers are 40% more likely to apply for a job at a company with a strong employer brand.

Our goal is straightforward: empower brand, marketing, and communication leaders to align brand metrics with broader business objectives and KPIs.

So why do CMOs often find it challenging to convey the importance of branding to their CEO counterparts? One reason may be the lack of quantifiable, agreed-upon metrics to measure a brand’s impact. Unlike more traditional marketing metrics such as click-through rates or conversion rates, the ROI of branding efforts can be harder to track and directly attribute to financial outcomes.

Introducing Brand Quotient

This is where marketing and communications leaders need help—and it’s why Long Dash developed our Brand Quotient (BQ). Designed as a diagnostic and a validator, BQ helps brand leaders substantiate the need for a rebrand and measure the impact of a new brand across the four key pillars of brand:

The stories you tell
The experiences you create
The people who represent you
The business you operate

BQ unfolds in two parts, seamlessly positioned as a wrap-around to a rebranding effort. First, in our discovery phase of work, we marry qualitative research with a deeper quantitative study of how your current brand performs across these four key pillars, with awareness, perception, satisfaction, and loyalty metrics in mind. Using our proprietary scoring system, results allow us to hone in on a baseline BQ score that we can later re-evaluate, one-year post the launch of your reinvigorated brand.

Conveniently, this baseline assessment also helps us identify very specific needs and recommendations to inform the brand repositioning effort itself. It’s a win-win. And it gets even better. One year post-launch, we conduct the same diagnostic study to understand how the brand may or may not have influenced individual performance indicators as well as your overall BQ score.

Great performance is, well, great. But even flat or poor performance can teach us something. Perhaps awareness has gone down but sentiment is greatly improved, or perhaps your pipeline has shrunk but your win-rate is impressively high. These kinds of insights may imply that the brand is more deeply attuned to and resonant with a more precise audience—the right audience, if you will.

We also look at this performance relative to the cost invested into the rebrand effort. It’s nearly impossible to prove direct attribution or causation between brand and business performance—but correlative performance is meaningful.

Positioning brand as the business driver that it is

Our goal is straightforward: empower brand, marketing, and communication leaders to align brand metrics with broader business objectives and KPIs. By doing so, CMOs can bridge the gap between marketing and finance, articulating the ROI and shareholder value that resonate with CEOs and board members. Presenting a compelling case for the strategic importance of a brand transforms marketing leaders into trusted advisors, essential for driving the company’s growth agenda.

I’ve said it once, and I’ll say it again: a brand is not just a logo or a tagline; it’s a promise made and kept. Consistently delivering on that promise across every touchpoint transforms your brand into your best strategic business asset and competitive advantage.

So we encourage you to unleash the power of your brand. Measure it. Apply it consistently. And then watch your business grow.

To learn more about Brand Quotient, reach out to Karine at kbailly@longdash.co.