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.