How can organisations understand the bottom line impact of brand?

Brand projects haven’t always been analysed with the same fine tooth comb, perhaps because some stakeholders – certainly those a step removed from the creative industries – don’t truly understand the bottom line impact that a brand investment could have.

However, that is changing – and the economic backdrop is only one of the reasons why.

Mindsets are changing. A growing number of people, in varying roles, acknowledge that brand is about far more than merely a logo. Brand is a big business. And it could prove the catalyst – if not the backbone – of rapid and sustainable growth.

But is success subjective and/or intangible? Or can bottom line impact be measured?

The dmi:Design Value Index (in the USA) evidences that the latter is certainly true. This framework monitors the impact that public traded companies’ investment in design has on stock value, and interestingly, it benchmarks that strategic value against the S&P 500. Design-centric brands including Coca-Cola, Nike, Stanley Black & Decker, and Intuit are known to yield 10-year returns 200% greater than their counterparts. However, the days of it taking a decade to bear such results are long gone.

In terms of where to begin if you’re not a public enterprise organisation, it’s crucial to define a starting point – the baseline from which to measure any progress and bottom-line impact moving forward. To aid this process, think about why the brand investment is being made in the first place – what it is striving to achieve. With one eye on the end goal, it is easier to monitor and measure any upturn experienced on this journey to a competitive advantage.

That advantage – or the effectiveness of the brand investment – will naturally show up differently from one business to the next.

If impact is to be judged on purely fiscal merit, data including an upturn in revenue and profit, market penetration, share price, and the ability to secure onward growth funding, will prove core to measurability. The ease with which new products and services can be launched, and the speed with which they can gain traction, could also enhance this picture, if relevant. Some businesses even evaluate balance sheet strength.

Wider brand-related elements that will naturally ultimately impact on a company’s management accounts, include external stakeholder perceptions, ranging from customer attitudes and experience levels to employee satisfaction.

This is where things get really interesting, because some organisations don’t readily acknowledge the influence that brand can have on every customer touchpoint. But when it has the power to drive cultural change or service design, for instance, it could affect the number of complaints an organisation receives, a firm’s NPS score, or even the ability to meet SLA targets. This data is regulated in certain industries, so progress in these respects can be critical. It could better safeguard client retention too, which is particularly beneficial in overly competitive markets.

From an internal point of view, it could strengthen the organisation’s ability to attract the hottest talent, retain staff in a competitive space, and even boost the performance of employees if behaviour is positively shaped by brand work. It could go so far as to accelerate a company’s ESG (environmental, social and corporate governance) value.

Sometimes the objective for a brand investment project, is to better structure a product or service architecture, which can help to define the value of a business and its divisions if it is to be positioned for sale – wholly or in part.

In truth, the list of potential measurables could go on. The challenge isn’t necessarily to consider how brand impact can be measured, but to define what truly matters to the business concerned, and to simply start measuring! So many organisations – of varying sizes and maturity – not just SMEs or start-ups, fail to track the data that matters to them in this respect. But if there are no analysis metrics in place – or if the only measurable is revenue uplift – it could prove extremely difficult to understand if the investment has truly been worthwhile.

For some people, anecdotal ‘gut feel’ may be enough, of course. However, if organisations and their brand partners better talked about this topic and made steps towards greater measurability, we’d perhaps finally move on from the perception that brand is just a logo. Because, as we know, it’s really not.