How do you measure the value that your brand is adding to your business? Experts suggest several metrics to weigh the value of a brand, such as the difference in the price of branded label products versus that of a non-branded label product.
You may be tempted to measure everything, but instead focus on these four factors that matter most.
1. Consumer Views and Opinions of Your Company
One of the most practical metrics to gauge the real worth of your brand is what your customers are saying about it. Some 84% of consumers will somewhat or totally trust opinions and recommendations from friends, colleagues, and family about a brand's products and services, according to a Nielsen report.
The following can help you measure how your brand adds value to your business when your customers are forming opinions about your brand:
- Positive customer reviews. Some 90% of respondents who read positive customer reviews on the Internet said their buying decision was influenced by what they read, according to a survey by Dimensional Research. By measuring the outcome of customers leaving a positive review about your business on the Internet, you can get the real value the brand contributes to your business.
- Customer recommendation. Word-of-mouth marketing is one of the most powerful measures of value your brand can get. When customers recommend your business to others, they demonstrate a strong faith in the brand.
- Customer loyalty. Customer loyalty is a strong signal of how valuable your brand is. For example, when customers were asked about the impact of the Volkswagen emission scandal, many customers reported that they didn't feel differently about their car but felt betrayed by the brand. Moreover, according to a White House Office of Consumer Affairs, the worth of a loyal customer is 10X the value of their first purchase.
2. The Value of Your Business Name
The majority of B2C consumers are willing to pay a premium for a well-known brand. Though this is a cognitive interaction between the brand and a consumer, many B2C customers still claim they're only paying the premium because of the quality of the product.
Reports reiterate that marketers erroneously associate the product quality, styling, and service reliability to the value of a brand. The real value comes from the ability of the brand to charge more using its name.
What goes into a good brand name? Here are some measuring pointers to see how a name contributes to the success of a business.
- Do customers love the name? If the true value of a brand is in its name, does a company's name have any effect on the company’s success? Margot Bushnaq, founder and CEO of BrandBucket a brandable business name company says, "Naming your business is the first step in the continuous process of branding. In linguistics, different types of names are thought to be easier to become a brand. We call these brandable business names. They are almost always short, easy to pronounce, spell, and remember. They evoke a feeling that you can capitalize on in your messaging that will lead to an emotional connection between your company and the consumer."
- Is company able to command a premium price using its name? Relying just on its name on the label as the only differentiating factor, is a brand able to charge more for the same product? Why do customers pick an expensive brand name product of similar quality over a product without a brand name?
3. Marketing Return on Investment
A strong brand will deliver greater marketing ROI over an average brand. The greater the ROI generated from each marketing spend, the greater the value of the brand. (Of course, you will also have to put into consideration what marketing channel is being reviewed.)
The following benchmarks can help you to measure how effective your marketing ROI is and to judge how effective your brand is.
- Social media effectiveness. First of all, what social media channels are being used by marketers in your industry, and how effective are the results they get? Compare the average industry result to what your brand is doing then determine from the outcome whether your brand is really effective.
- Customer trust in advertising. Reports say that consumer trust in advertising is increasing. This is more so for ads on branded website, which is reported to have gained a 9% increase in trust from 62% in 2007 to 69% in 2013. How do your customers respond to ads from your company?
4. Brand Advocacy
Advocates of your brand can be your strongest marketing arsenal.
To measure the value of a brand, take a look at how many of its customers are brand advocates versus how many are passive customers. A high-performing brand has more customers who are advocates.
To distinguish your brand advocates from passive customers, you can look through the following criteria:
- Engages with brand's content on social media. The brand advocate actively interacts with the content the brand shares on social media. As a result of this engagement, the brand gets more exposure to its content on social media.
- Word-of-mouth recommendation. Brand advocates will spread the message about your brand through word-of-mouth. This method, known as earned advertising, is the most influential form of marketing a brand can get.
Oh, boy. The dreaded sign up form.
Before you run for the hills, we wanted to let you know that MarketingProfs has thousands of marketing resources, including this one (yes, the one behind this sign up form), entirely free!
Simply subscribe to our newsletter and get instant access to how-to articles, guides, webinars and more for nada, nothing, zip, zilch, on the house...delivered right to your inbox! MarketingProfs is the largest marketing community in the world, and we are here to help you be a better marketer.
You may also like:
- Six Key Metrics for Measuring Online Event Success [Infographic]
- How to Improve Marketing Attribution Without Burdening Your Sales Team
- Chin up, Marketers: The Demise of Third-Party Cookies Isn't All Bad
- How to Marry Offline and Online Attribution Data for a 360 View in Google Analytics
- How B2B Marketers Can Absorb and Apply Data Effectively: Six Questions Answered