| The idea of a brand is deeply rooted in the | | | | instances, brand value accounts for far more than |
| psyche of managers as being associated with the | | | | that. The issue is how do we measure brand |
| delivery of tangible products to consumers but | | | | value and what metrics are available for us to use |
| today we are increasingly delivering intangible | | | | as part of a Brand KPI tool. |
| services rather than goods so is branding still | | | | Using financial metrics for brand performance |
| relevant. Traditionally a business has been viewed | | | | measurement you will find the following as the |
| by senior management as split into discrete | | | | primary metrics to monitor and analyze: |
| divisions, sales and marketing, production, HR, IT, | | | | - Sales Generation - measures brand as a factor |
| legal and accounting. Some divisions created | | | | in the purchasing decision |
| revenue and b the brand identity was important | | | | - ROI - measures the ROI using the accounting |
| for customer recognition and action needed to be | | | | goodwill value and treating it as any other balance |
| taken to maximize that while other divisions | | | | sheet asset |
| created cost that reduced the brand value and | | | | - Transaction Value - looks at the contribution |
| this needed to be cut. Following this methodology | | | | from product lines and product mix and the |
| would logically result in increased profits. | | | | impact of the brand on that contribution |
| This led in practice to highly dysfunctional decision | | | | - Growth Sustainability -this is a measure of how |
| making with, for example, IT staff being cut only | | | | much the brand is contributing to sales rate |
| for decreased effectiveness across the business | | | | growth without the business introducing further |
| producing reducing sales generation and increasing | | | | investment to gain that market share. |
| costs in other parts of the business. | | | | Financial value is probably the simplest metric to |
| Decreased profitability was the result of making | | | | determine as we can extrapolate "goodwill" |
| otherwise perfectly logical business decisions | | | | valuations using accounting and financial data |
| based on KPI metrics. | | | | coupled with share price information. At least with |
| The Balanced Business Scorecard seeks to | | | | share pricing information we have a set finite |
| address this dysfunctional approach to business | | | | value that the market is placing on our business |
| management and looks at how the entire | | | | and the financial accounting information can give |
| business operates as a cohesive, holistic whole. | | | | us a basis for determining how much of the price |
| Viewing all divisions of the business as creating | | | | the market will pay for a share is determined by |
| value allows for logical rational business decisions | | | | the valuation of the goodwill. |
| that do lead to increased shareholder value and | | | | Measuring brand perception and performance is |
| enhanced profitability. | | | | trickier as we dealing with nebulous concepts that |
| Is measuring traditional brand metrics still relevant? | | | | we know have an impact but cannot directly |
| The blunt answer is yes, the company brand is | | | | measure. Performing customer awareness |
| perhaps more important than it ever has been | | | | surveys will help in providing a measure of how |
| but how the brand is being used has probably | | | | well known the brand is with consumers in a given |
| altered greatly as is how the value of a brand is | | | | section of the population or target market |
| perceived not just by customers but also by | | | | segment. All of these can be measured but the |
| shareholders. | | | | metrics that are produced are based upon |
| For many listed companies the value ascribed to | | | | subjective questioning and even more subjective |
| the company brand accounts for more than a | | | | answers. |
| third of the company share value. In many | | | | |