Independent Validation: Brand Keys Metrics Correlate with Sales/Profitability
An independent business equity valuation firm examined the correlation between Brand Keys brand equity metrics and company value. They selected 10 categories from the Brand Keys Customer Loyalty & Engagement
Index and conducted correlations against our rankings.
The company value metrics used were Total Enterprise Value (TEV= market
capitalization + outstanding debt), EBITDA (free cash flow) and Revenue. These
three metrics were converted to two ratios: TEV/EBITDA and TEV/Rev for
comparison to the Brand Keys equity metrics.
The correlations ranged from a low of .830 to a high of .901 between company
value and Brand Keys equity rankings which, further confirms the ability of
Brand Keys assessments to predict impact on future purchase behavior with
extraordinary accuracy, as well as operating on a cross-category basis.
From: Howard Schultz Sent: Wednesday, February 14, 2007 10:39 AM PST
Subject: The commoditization of the Starbucks Experience as you prepare for the FY 08 strategic planning process, I want to share some of my thoughts with you.
Over the past ten years, in order to achieve the growth, development, and scale necessary to go from less than 1,000 stores to 13,000 stores and beyond, we have had to make a series of decisions that, in the commoditization of our brand .
Many of these decisions were probably right at the time, and on their own merit would not have created the dilution of the experience ; but in this case, the sum is much greater and, unfortunately, much more damaging than the individual pieces. For example, when we went to automatic espresso machines, we solved a major problem in terms of speed of service and efficiency. At the same time, we overlooked the fact that we would remove much of the romance and theatre that was in play with the use of the La Marzocca machines. . . .
Thank You! A blind pig may find truffles, but it helps to know that they grow under oak trees. — David Ogilvy (1911–1992)
Thank you for your attention. Robert Passikoff President, Brand Keys, Inc. 212-532-6028 x12 [email_address] www.brandkeys.com Amy Shea EVP, Brand Keys, Inc. 212-532-6028 x14 [email_address] www.brandkeys.com