Establishing a Brand Scorecard

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Establishing a Brand Scorecard

  1. 1. How To Guide Establishing a Brand Scorecard Executive Summary: This report has been designed to provide practical advice for benchmarking and improving your branding capabilities. Read this brief 7-page report to learn:  Brand Management Defined  Principles of a Strong Brand  What is Brand Equity?  Capabilities Required to Measure Brands  Establishing a Brand Scorecard Read this report to learn how to prepare your organization for effective brand management. Use our tools to develop a Brand Scorecard that demonstrates increased Customer-Base Value.www.demandmetric.com Call a Principal Analyst: (866) 947-7744
  2. 2. 2 Table of Contents Page Brand Management Defined 3 Principles of a Strong Brand 3 What is Brand Equity? 4 Capabilities Required to Measure Brands 4 Establishing a Brand Scorecard 5 Conclusion 7www.demandmetric.com Call a Principal Analyst: (866) 947-7744
  3. 3. 3 Brand Management Defined Brand management is the application of marketing techniques to a specific product, product line, or brand. It seeks to increase the product’s perceived value to the customer and thereby increase brand franchise and brand equity. Marketers see a brand as an implied promise that the level of quality people have come to expect from a brand will continue with present and future purchases of the same product. This may increase sales by making a comparison with competing products more favorable. It may also enable the manufacturer to charge more for the product. The value of the brand is determined by the amount of profit it generates for the manufacturer. This results from a combination of increased sales and increased price. - Source: Wikipedia Principles of a Strong Brand Proctor & Gamble PLC pioneered the concept of Brand Management as a result of a memo sent by Neil H. McElroy. Following are principles of a strong brand:  Distinguished - is your brand “premium” or “economy”? Does your brand express the brand type adequately?  Enhance Image - does your brand accurately reflect and enhance the corporate/product image?  Benefit/Usage - does your brand describe the benefits of your product, or how it is used? (i.e. Mr. Clean)  Simple - is your brand recognizable and memorable?  Protectable - can you legally protect your brand?www.demandmetric.com Call a Principal Analyst: (866) 947-7744
  4. 4. 4 What is Brand Equity? Brand Equity can be defined as the value measurement associated with expected future revenues for the branded product. Many organizations use a Brand Scorecard in conjunction with a Marketing Dashboard to measure their return on marketing investments. The metric that can be used to measure overall Brand Equity is Customer-Base Value. Customer-Base Value (CBV) - the total number of customers multiplied by the net present value of those customers (gross profit contribution) over their average lifetime. Factors that influence the Customer-Base Value metric include:  Customer Retention Rate  Net Present Value for Each Customer  Brand Awareness & Preference  Corporate/Product Image  Purchasing Intentions  Customer Satisfaction  Customer Referral Rates Capabilities Required to Measure Brands 1. Senior Management Commitment - it is critical that Branding is viewed as a strategic endeavor and is driven top-down from the C-level. Otherwise, investments to strategically improve brand equity will not be approved. 2. Internal Brand Alignment - have you conducted an internal brand survey? Since much of branding takes place during conversations and via email, you need to know how your employees view the organization. If there is a gap between senior management’s and front-line customer service’s view, it needs to be resolved.www.demandmetric.com Call a Principal Analyst: (866) 947-7744
  5. 5. 5 3. Market Research Data - do you have any empirical data that demonstrates customer/market segment preferences, satisfaction, referral rates, purchasing intentions, and other important market research data. 4. Data Management - you need to be able to collect and manipulate marketing metrics and find causal links that connect them to high-level business metrics. For help in this area, read our report on Marketing Dashboards. 5. Systems & Technology - once you have built the discipline to collect the relevant brand equity data, consider housing your data in systems such as Customer Relationship Management (CRM), Enterprise Resource Planning (ERP), or other enterprise applications. Next, use these applications to generate reports such as “total number of customers”, “net present value of current customer base”, or other brand equity reports. 6. Brand Goals, Objectives, & KPIs - once you have the information, systems, and skills required to measure your brand effectively, take the time to strategically plan for brand improvements. Take a Balanced Scorecard approach to brand measurement by selecting specific Objectives, Measures, Targets, and Initiatives. Establishing a Brand Scorecard Creating a simple Brand Scorecard does not have to be as intimidating as it may sound. This section will outline the steps required to build an effective tool to measure your brand. 1. Achieve Brand Consensus - have a meeting with key brand stakeholders to ensure you have alignment on your corporate mission, vision, values, etc. Use our Branding Selection Tool for assistance. 2. Dig up Historical Information - track down any previous market research data, customer satisfaction surveys, and customer data such as: # of customers, average lifetime, average profit/customer, net present value of current customer base, market share, etc.www.demandmetric.com Call a Principal Analyst: (866) 947-7744
  6. 6. 6 3. Gather New Information - if you don’t have much information to go from, consider doing a small market research project to set benchmarks for brand awareness, preferences, purchasing intentions, etc. 4. Set Branding Goals & Objectives - your goals may be to improve C-level awareness of a specific product, to achieve commitment to brand values from customer-facing representatives, or increase understanding of value propositions amongst specific media sources. 5. Determine Specific Targets & Actions - this part of your scorecard deals with HOW you are going to achieve your goals & objectives. For example, you may wish to target the Sales & Service organizations to improve collateral, presentations, scripts & messaging. You might want to target All Employees with a brand revitalization effort. 6. Define Measures of Success - like all objectives, you need to determine how success will be measured, BEFORE you kick-off your initiative. These are the Key Performance Indicators (KPIs) that will be monitored to demonstrate improvement. Using Primary and Secondary success measures will help you differentiate subtle improvements within a specific target area. 7. Establish Goal Timeframe - you last step is to break the larger, overarching goals into more manageable pieces. If you are targeting Sales to use a new presentation deck, set a goal like: “have 50% of sales team using new presentation deck by June 1st, 2007.” 8. Build your Brand Scorecard - now that you understand each step of the process, use Demand Metric’s customizable Brand Scorecard Tool to create your own framework. 9. Benchmark Current Brand Score - take a snapshot of your current Customer-Base Value and other brand-related metrics to set a stake in the ground. 10. Demonstrate Brand Scorecard Improvement - revisit your Brand Scorecard quarterly and report on the success of your initiatives to demonstrate effectiveness.www.demandmetric.com Call a Principal Analyst: (866) 947-7744
  7. 7. 7 Conclusion Brands are intangible assets that are difficult to measure. That being said, it is not impossible for an organization to benchmark and demonstrate improvements to brand equity for a reasonable cost. If you do not have much experience with Branding and have a strategic imperative to measurably improve your brand, consider getting help from a consultant. Based on the best practices described in this report, and tools provided, you should be able to get started with a branding program. If you need more clarity, contact your Research Associate who can provide you with more tailored advice.www.demandmetric.com Call a Principal Analyst: (866) 947-7744

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