How to measure the ROI of brand building in 2019

Michaela Fiasová
Apr 30, 2019 · 5 min read
How do you know these two brands are valuable?

What’s the return on investment in your brand-building activities? A question that might seem a bit counter-intuitive at first, given the overwhelmingly brand-driven world we live in. Even more so, when you hear influencers praising the role of design and branding, such as A$AP Rocky at recent SXSW, talking about the Design and branding as a key differentiator in a brand’s success. Or after hearing someone like Gary Vee say that “creatives are the variable of success”.

As much as I’d like to just nod and strengthen my confirmation bias about the industry I’ve been in for a couple of years (and seen the difference in results branding can deliver) I still leave my mind open to question the fundamentals.

I use this approach because:

So, how do we asses the ROI of brand-building?

Measuring brand-building ROI traditionally

Traditionally, to determine brand-building ROI, marketers have subtracted merely the cost from profit and divided it by total value.

Well, as easy as it sounds, this calculation of how much sales increased after a specific “marketing investment” doesn’t tell the marketer anything about how your customers actually engaged with the campaign. Also, it doesn’t account for the short or long-term impact on the conversion rate.

ROI, based purely on these quantitative metrics, will not give you many insights on how to adjust your future investments or how people actually engage with your brand.

A balanced overview

To give people a more ‘balanced’ view of organizational performance, one of the strategic and non-financial performance measurements to traditional financial metrics is The Balanced Scorecard (BSC). Introduced in early 1970’, BSC is a holistic assessment of your brand’s value.

Naturally, with the rapid evolvement of our environment, its usefulness is nowadays discussed.

Brands have evolved beyond a single logo and a tagline to serve multiple other purposes.

Yet, now we understand how much of brand’s overall success is determined by its ability to communicate its values, and meaning (purpose), to both internal organizational culture and external brand communities (a.k.a. your customers).

Photo by Ian Schneider on Unsplash

The realization of the human factor, and looking at brand-building as a conversation rather than branded monologue, implies to count both quantitative (traditional) and qualitative measurements like perception, relevance or employee engagement.

To balance out both sides of the spectrum, using a strategic and holistic framework will create a more meaningful view of your brand’s value.

How to track the ROI from your brand-building

Whether you’ll follow BSC from start to end or not, the four perspectives BSC introduces are a great way to start assessing your ROI more holistically and with less elusiveness. Moreover, you can strategically measure these 4 dimensions whether you’re a small startup or an already well-established company.

Here are the 4 Brand value perspectives perfectly summarised by bestselling author Denise Lee Yohn:

1. Financial value

2. Customer valuethe impact of your brand on customers.

3. Business process valuethe improvements to organizational processes resulting from your brand.

4. Culture valueyour brand’s influence on organization culture and employee engagement.

Conclusion

A strong brand should be a priority for all businesses striving for success — and the proof is in the numbers. Brands that are consistently presented see an average revenue increase of 23%.

When looking at the ROI from your brand-building activities you should look for frameworks that incorporate both qualitative and quantitative measurements.

Although it might not completely satisfy the desire for a purely objective ROI, it does provide a reliable and robust view of brand value. And, most importantly, a balanced one.

What do you think about measuring ROI in brand-building? Do you use any other metrics? Let me know in the comments below!

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Michaela Fiasová

Written by

Entrepreneurial Designer and Thinker ~ Writing to inspire, raise questions, ignite change and share ideas ~ mfiasova.com

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