Joanna Seddon, founder and managing partner of Presciant, and CEO of the Marketing Accountability Standards Board, advocates here that the CMO can be a driver of business growth by taking charge of every aspect of the brand and making the C Suite realize that everything that every employee does that touches a customer or potential customer, directly or indirectly, adds to or subtracts from the value that brand can create.
‘Brand’ is one of the most overused but least understood words in business. Most people do not know what it means. This includes those inside and outside the marketing department. As a result, a company’s brand is consistently underestimated and undervalued. The full extent of its power to drive business results remains untapped.
Understanding what the power of brand can do for the company, and implementing brand valuation best practices can bring tremendous financial benefits. It can drive revenues by increasing your product’s appeal to potential customers, grow margins by upholding or enabling you to raise prices, and reduce the cost of customer acquisition by creating loyal customers and repeat purchases.
The problem is that attention is focused on what can be called ‘little “b” brand’, brand building in the traditional marketing context. Even within the most advanced B2C companies, brand investment is often taken to mean advertising and visual identity. In most B2B businesses, executives see branding as a purely consumer exercise (they think Coke cans) and as having nothing to do with the day-to-day operations of the business.
Brand is so much more than marketing, not that marketing isn’t important. Brand in the ‘Big B’ sense, encompasses the whole company. Everything that every employee does that touches a customer or potential customer, directly or indirectly, adds to or subtracts from the value that brand can create. This means all functions within the business – not just marketing but also sales, R&D, HR, manufacturing, finance, operations, IT and legal. Together, these functions are responsible for the more tangible, and more valuable side of a brand – the product or service qualities and customer experience. Marketing is like ‘putting lipstick on a pig’ if the rest of the company doesn’t deliver on what it promises. Totally useless, and ultimately value destroying.
How do you implement branding in the ‘Big B’ sense? Begin by measuring. Conduct a brand valuation. Determine how much value your brand is adding to the company now. Don’t do this for the sake of a number. A brand valuation number may be useful in transactions and for PR but that’s it. You can’t do anything with a number – numbers change every day.
Instead, conduct a strategic brand valuation to uncover how the brand drives value by impacting the customer decision to purchase. Determine how well the brand is delivering on the factors that customers care about today, and more importantly, will care about in future. Identify where the brand is underperforming, where there are gaps and opportunities to meet wants and needs that the brand is not meeting, and, if you can, current and future needs that no competitor brand is meeting either.
Then, you must look at what changes the company needs to make to fill the gaps and realize the opportunities. These changes will go way beyond the marketing department. They will definitely include changes to product design and function and impact product innovation strategy, as well as customer service, the tangible and virtual customer experience (from retail sales and sales and service calls to the entire online experience). They may also impact hiring and HR strategy, company organization and operations. In all of this, it is critical to prioritize. This is where the brand valuation model is so important. It enables you to quantify the uplift to revenues and profits of impact of different actions, set these against implementation costs and prioritize the changes which will generate the greatest financial returns.
The most important benefit of brand valuation of all, is that it not only identifies the changes that need to take place, but it also enables you to implement them. Big ‘B’ framing translates marketing speak into the language that CEOs, CFOs, and Boards understand – facts and figures. Brand valuation provides a robust business case for recommendations and can get them accepted and acted on.
This may sound like an enormously complicated, time-consuming, and expensive exercise. But it really isn’t. The beauty of brand valuation is that it makes use of things that already exist. The key ingredients are financial data, which every company has (though you may have to manipulate it differently, to ensure a customer-facing perspective), existing customer data and research (though you may have to add to it, depending on how extensive it is), and secondary research into market factors, competitor activities and trends. It uses internet tools and is now AI assisted, which cuts the work down. Involving key constituencies from outside the marketing department is important from the start, but especially in detailing the business changes that will be made, how they will be implemented, how long they will take and how much they will cost.
The results of a successful strategic brand valuation can be transformative for the whole company. A common reaction of senior marketing executives to the findings of a brand valuation is, “Oh no! This is about more than just me”. But that is the reason it will result in growth for the business.
A brand valuation of one of the largest US banks resulted in a complete overhaul of customer service operations and the decision to make a major acquisition in an area where they had a strong brand, but their presence was small. A major airline restructured its rewards program, redid its boarding process, and took aircraft out of service to reduce the number of seats. A global agricultural business simplified its product offering and changed its processes to make decision making faster. A leading snacking company reallocated its R&D investment and entered an untapped but fast growing adjacent new category. (WARC subscribers can read about case studies like these and how to create a brand valuation plan in this WARC Best Practice, Elevating marketing to its rightful place in the boardroom.)
Above all, a ‘Big B’ brand valuation can dramatically transform marketing. Brand valuations have led to major brand strategy changes (such as changing the name of a major telecommunications company to that of an acquisition), increased marketing budgets, reallocated marketing investment, a new recognition of and respect for marketing as the key growth driver of companies, the reinstatement of the CMO role, and the CMO’s elevation to their rightful place in the boardroom.