Some tips on measuring Brand Health

You’ll have gathered that I don’t blog regularly. I know I should but I don’t. I blog spasmodically, when I have something I want to share, a book I have read or some piece of business/marketing insight I’m thinking about. So, here’s something about measuring Brand Health. It was prompted by a question an old colleague asked me the other day. He works for a large global business (no hints) that wants to become even more brand-led and wants to make a regular review of the health of its brands the catalyst for this.

I wrote him quite a nice thought piece on this (no I won’t share that just yet – I may develop it a bit first and maybe write an article). It is a subject on which I have some strong views based on several years wrestling with it, although I would not claim to be the world’s expert (marketing expert is an oxymoron – marketers are a mile wide and an inch deep, sometimes not even an inch). Tell you what – I’ll give you the headlines.

Brands account for roughly half the value of a business if they have them. If not you can call it reputation and it amounts to the same thing (the value of a brand is its reputation).
Therefore, brand health (or a company’s reputation) should be reviewed by the board of a company as often as they review their financial performance. Just doing this will force the business to be more brand-led.
You have to start with inputs and outputs. The inputs are the various things you can invest behind a brand to create growth – product quality, distribution, competitive pricing, weight and quality of marketing & communications. The outputs are the market place performance results that should come from all this investment – market share, revenue, margin, ROI. Are we doing the right things, are they having the right results?

Some people look for some composite score for all of this. Some even focus on brand value using whichever methodology has caught their eye. In my view this is all pointless. It will be some form of a balanced scorecard where “apples” will have been added to “pears” and some of the fruit salad will be both arbitrary and subjective. Either way it ends up being very theoretical and not very useful – neither predictive nor diagnostic in my experience.

It is nevertheless worth focusing on what converts the inputs to the outputs in order to get some insight that is both diagnostic and predictive of future performance – surely that’s the point of the whole thing, if not then you might as well just count the cash and plot the financial graphs.

To do this properly requires some fact-based understanding about how brands work, in particular how people in the category come to adopt – or unadopt – brands. Most brand owners don’t have this understanding – they may think they do, but they don’t. They will have pieces of the story (based on some facts and a lot of speculation and prejudice) but nowhere close to the whole story of why someone chooses, this time, to buy a BMW rather than an Audi, or an Apple rather than a Dell.

There are consultancies who will tell you otherwise – there are as many models of brand health and brand conversion as there are consultancies, all sold to potential clients with total conviction that they are right. What does that tell you?

The perfect model of what drives conversion to a brand is the Holy Grail of marketing. Many claim to have found it, no-one has, at least not yet. So while we keep looking – and we should – here are the things I look at in a brand to see how healthy it is:-

Brand Price Elasticity – since the ultimate test of the strength of a brand is that people are prepared to pay a price premium for it (or a higher volume at parity price) price elasticity, how it compares versus the consideration set of competitive brands and how it improves over time, is the ultimate measure. The issues are that a) getting accurate data regularly is expensive b) very careful thought needs to given as to the competitive consideration set (it is rarely who you think) and the sample (you don’t want to know the views of everyone or the data just gets flattened). However, there are useful proxies for price elasticity that can be tracked.

Recruitment – any brand needs to be recruiting younger (than its target) users or it eventually goes into decline, a decline that can be hard or impossible to reverse. Declining uptake (and weakening attitudes) among younger users has proved to be an extremely accurate predictor of future brand performance.

Differentiation – not a lot of people know that the Y&R Brand Evaluator model was developed by MIT. Even fewer know that MIT did an exercise to look at which of the 4 key measures in the model correlated highest with actual market performance. The answer was differentiation. The more the target audience perceives a brand to be different to its competitors the stronger it is and the better it performs over time. One would assume the perceived difference would need to be relevant (one of the other scores in the Y&R model) but it doesn’t (or maybe sensible marketers ensure the difference is always relevant). But the fact is that brands that stand out as different from their consideration set perform consistently well (Apple, VW, Guinness, Nike)

Momentum – this is based on the latest from social sciences but again, like differentiation, has been to shown to reflect brand strength accurately and in the short term (unlike standard image and attribute measures, momentum scores can change in just a few months). As humans we tend to gravitate towards what we perceive to be what everyone else is doing – we follow the perceived trends like a flock of birds or shoal of fish (literally). The extent to which people think that a brand is ‘getting more popular’ is a key score.

As I say, all of these can and should be measured and tracked. But a healthy brand needs some other things to stay healthy. A healthy brand needs healthy foundations. I list my top three below but would stress that in my view these cannot be measured. They need to be assessed by people with experience:-

A Great Brand Positioning – clear, competitive and inspires great execution

Famous Brand Signifiers – strong brands are shown to have well known collaterals (can be a pack design, logo, some aspect of the product experience, music etc)

“Product Recipe” – a clearly set out technical specification that is linked to its brand positioning and its signifiers. Distinctive brands don’t just happen by chance and they don’t remain distinctive over time by chance. Someone or something is keeping them that way.

Last but not least – consistency. Healthy brands are consistent (even though their form and their messages will evolve over time albeit executed with a freshness that feels almost inconsistent). All the strongest brands adapt with the changing trends of its market and society and yet maintain a consistency of personality and identity. Now that is tough to do – about as tough as all of us find it to enjoy life, build careers, please the family and stay healthy.

2 Responses

  1. I look forward to the finished piece Mark.

    I agree inputs and outputs is the best place to start in brand health diagnostics, but no health check is complete without an internal examination.

    As your refine your piece please don’t forget employees.

    By your own definition, employees would be both inputs (invest in them and you will get results) and outputs (employee advocacy must be the most effective form of marketing) And, collectively, they form the black box in between the I/Ps and O/Ps (the adaptive control system if you like)

    Brand and reputation are virtuous cycles that start and end with employees (hopefully healthy and content people who are building their careers and pleasing their families)

  2. mark sherrington

    Very nice point Sean regarding employees being both inputs and outputs of brand health. thanks

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