Measuring the ROI of Your Branding Efforts: A Guide to Brand KPIs

The impact of a strong brand on a company's performance is widely acknowledged. However, many organizations fail to measure their brand's influence and prioritize marketing metrics over branding metrics. A study by Millward Brown shows that powerful brands achieve triple the sales volume and a 13% price premium compared to weaker brands, emphasizing the importance of developing brand equity. This guide will help you understand the key performance indicators (KPIs) for branding and how to measure them effectively.

Defining a Strong Brand

A strong brand excels in three dimensions:

1. Relevance and Resonance: The brand meets stakeholders' needs and fosters an emotional connection.
2. Differentiation: The brand is unique, innovative, and distinguishes itself from competitors.
3. Memorability and Salience: The brand achieves top-of-mind awareness.

Brand KPI Categories

Measuring brand equity and the ROI of branding efforts can be a complex process. To simplify it, categorize brand KPIs into three groups:

1. Brand Behavior
2. Brand Perception
3. Brand Performance

1. Measuring Brand Behavior

Brand behavior ensures internal alignment and employee engagement within a company. Track KPIs for brand behavior to evaluate a company's commitment to fostering a culture that promotes high levels of employee engagement and brand ambassadorship. KPIs for this category can vary depending on the company's objectives, such as:

• Ensuring employees understand the brand
• Analyzing how employees align with the brand
• Evaluating internal brand leadership and ambassadorship
• Measuring employee engagement with the brand

Examples of brand behavior KPIs:

• Employees' ability to accurately articulate the company's brand
• Consistent demonstration of on-brand behaviors aligned with the company's values
• Active employee participation in content creation and social sharing
• Number of new hire referrals
• Customer satisfaction/complaints

Actionable tips:

• Conduct regular training sessions to ensure employees understand the brand values and messaging
• Establish guidelines for on-brand behaviors and provide feedback on employees' alignment
• Encourage employees to create and share content related to the brand
• Implement a referral program to incentivize employees to recommend new hires

2. Measuring Brand Perception

Brand perception evaluates customer awareness and sentiment towards a company's brand. It is divided into two categories: awareness and consideration.

Awareness KPIs:

• Recognition
• Recall
• Traffic
• Community size
• Reach
• Impressions

Consideration KPIs:

• Differentiation
• Relevance
• Esteem
• Perceived quality
• Purchase intent

Actionable tips:

• Use social listening tools to monitor organic conversations about your brand across social media channels
• Conduct customer interviews or surveys to gauge brand recognition, recall, and consideration
• Collaborate with a market research firm experienced in brand-related testing to assess differentiation, relevance, and purchase intent accurately

3. Measuring Brand Performance

Financial KPIs are crucial for demonstrating the ROI of branding efforts. Indicators of a strong brand include increased market share, revenue, profitability, and business valuation, as well as decreased customer acquisition costs. Brand performance KPIs reveal the true ROI of branding initiatives.

Purchase KPIs:

• Leads
• Sales
• Close ratio
• Preference
• Price premium

Loyalty KPIs:

• Customer satisfaction
• Repeat purchase
• Referrals
• Retention
• Customer lifetime value

Financial KPIs:

• Market share
• Revenue
• Profitability
• Cost per acquisition
• Brand valuation

Actionable tips:

• Monitor lead generation, sales, and close ratios regularly to gauge your brand's impact on customer behavior
• Collect customer feedback to measure satisfaction, and use this information to improve your products or services
• Track repeat purchases, referrals, and retention rates to assess brand loyalty
• Analyze financial KPIs such as market share, revenue, profitability, cost per acquisition, and brand valuation to determine the overall ROI of your branding efforts

Brand KPIs in Action: A Comprehensive Approach by BrandStruck

BrandStruck, a brand strategy platform, provides an insightful perspective on how to measure brand performance at each stage of a decision-making process. The approach is based on the brand funnel, which includes awareness, familiarity, consideration, purchase, and advocacy stages.

In the awareness stage, the key performance indicators (KPIs) include top of mind (TOM) brand awareness, spontaneous brand awareness, and prompted brand awareness. These KPIs are measured by asking respondents unprompted questions like, "When you think about smartphones (TV channels, charities, etc.), which brands come to your mind?".

During the familiarity stage, the focus shifts to brand salience and the strength of distinctive brand assets. Brand salience is defined as "the propensity of the brand to be thought of by buyers in buying situations". It can be measured by presenting respondents with a randomized list of cues and attributes and asking them which brands they associate with each statement. The strength of distinctive brand assets is measured by asking respondents whether they recognize particular branding elements, and with which brands they associate them.

In the consideration stage, the primary KPI is purchase intent, which is measured by simply asking whether people would consider purchasing your product or brand.

The purchase stage is evaluated by measuring sales volume and sales value. This is the only stage where real data, not people's declarations, is used.

Finally, in the advocacy stage, the Net Promoter Score (NPS) is used as a KPI. It is calculated by asking people how likely they are, on a scale from 0 to 10, to recommend your brand to a friend. The percentage of detractors is subtracted from the percentage of promoters to calculate the final result.

This approach to brand KPIs provides a robust framework for measuring brand performance across all stages of the customer journey. It emphasizes the importance of using relevant KPIs at each stage and understanding the process of how consumers make purchasing decisions.

Industry-Specific Advice for Measuring Brand KPIs

Understanding the Unique Branding Needs of Different Industries

While the core principles of branding apply across industries, the specific metrics and strategies that businesses should focus on can vary significantly depending on their industry. Understanding these nuances is crucial for developing an effective branding strategy and accurately measuring its impact.

Retail Industry: The Power of Customer Service

In the retail sector, customer service plays a pivotal role in shaping brand perception. Customers often associate their shopping experience directly with the brand, making customer satisfaction scores a crucial KPI. Retail businesses should also pay close attention to metrics like repeat purchase rates and customer loyalty, as these can indicate the success of their branding efforts.

B2B Software Industry: Employees as Brand Ambassadors

For B2B software companies, internal brand behavior and employee engagement can be particularly important. These companies often rely on their employees to serve as brand ambassadors, making it essential to measure and improve metrics like employee understanding of the brand and participation in brand-related activities.

Fast Food and Fashion Industries: The Importance of Differentiation

In highly competitive industries like fast food or fashion, differentiation is key. These businesses need to ensure that their brand stands out from the crowd, making KPIs related to brand uniqueness and innovation particularly relevant. Tracking brand awareness and recall can also be crucial, as these metrics can indicate whether a brand is achieving the desired level of visibility in the market.

Tailoring Your Branding Strategy to Your Industry

While the general principles of branding are universal, the specific strategies and KPIs that businesses should focus on can vary depending on their industry. By understanding these industry-specific nuances, businesses can tailor their branding strategies more effectively and accurately measure the impact of their efforts.

Challenges and Solutions in Measuring Brand KPIs

Measuring brand KPIs can present several challenges. One of the most common is the difficulty in quantifying qualitative aspects of a brand, such as brand perception or customer sentiment. Traditional metrics may not fully capture these elements, making it challenging to assess the true impact of branding efforts.

Another challenge is the time lag between branding efforts and their impact on financial performance. Branding is a long-term investment, and its effects may not be immediately visible in financial KPIs. This can make it difficult to justify investment in branding activities.

Additionally, the vast amount of data available can be overwhelming. Businesses may struggle to identify which metrics are most relevant and how to interpret them effectively.

Despite these challenges, there are solutions available. For the challenge of quantifying qualitative aspects, businesses can leverage tools like sentiment analysis or Net Promoter Score (NPS) to gain insights into customer perceptions and loyalty. To address the time lag issue, businesses can focus on intermediate KPIs, such as brand awareness or customer engagement, which can show the immediate impact of branding efforts. As for the challenge of data overload, businesses can use data analytics tools to sift through the data and identify key insights. Moreover, setting clear objectives and identifying relevant KPIs from the outset can help businesses stay focused and make the most of their data.

Tools and Resources for Measuring Brand KPIs

Web Analytics Tools:

Google Analytics is a powerful tool for tracking website traffic, user behavior, and conversion rates. It provides valuable insights into brand awareness and engagement, making it an essential tool for any business looking to measure their brand KPIs.

Social Listening Tools:

Brandwatch and Mention are examples of social listening tools that monitor brand mentions across social media platforms and the web. These tools offer valuable data on brand perception and sentiment, helping businesses understand how their brand is being discussed in the public sphere.

Survey Tools:

SurveyMonkey and Qualtrics are popular tools for conducting customer surveys. These can be used to measure brand awareness, recall, and consideration, providing direct feedback from customers about their perceptions of your brand.

Marketing Research Platforms:

For more in-depth analysis, advanced marketing research platforms like Nielsen or Kantar can be used. These platforms can provide detailed insights into brand salience and other complex brand KPIs.

Customer Relationship Management (CRM) Systems:

CRM systems like Salesforce or HubSpot can track sales data and customer interactions. These systems provide insights into purchase KPIs and customer loyalty, helping businesses understand how their brand influences customer behavior.

Net Promoter Score (NPS) Tools:

Tools like Delighted or CheckMarket can be used to measure Net Promoter Score (NPS), a key metric for assessing customer loyalty and advocacy. By asking customers how likely they are to recommend your brand to others, these tools can provide a clear measure of your brand's performance in terms of customer satisfaction and loyalty.

Conclusion

Measuring your brand equity and the ROI of your branding efforts can be a complex and ongoing process. However, it is a valuable investment that can provide a sustained competitive advantage for your business. By understanding the key performance indicators (KPIs) for branding and following actionable tips to measure and improve them effectively, you will gain crucial insights that inform your business decisions and contribute to your brand's long-term success. Remember to consistently monitor these KPIs and be prepared to make adjustments as needed to ensure your branding efforts continue to yield positive results.

Key Takeaways :

1. A strong brand is characterized by relevance, differentiation, and memorability, leading to better sales volume and pricing power.
2. Brand KPIs can be categorized into three groups: Brand Behavior, Brand Perception, and Brand Performance.
3. Measuring Brand Behavior KPIs helps evaluate internal alignment, employee engagement, and brand ambassadorship.
4. Brand Perception KPIs assess customer awareness and sentiments towards a company's brand, requiring advanced methods and tools for accurate measurement.
5. Brand Performance KPIs demonstrate the ROI of branding efforts through financial indicators such as market share, revenue, profitability, and business valuation.
6. Consistently monitoring and improving brand KPIs is essential for gaining valuable insights that inform business decisions and contribute to long-term success.

Additional Resources

1. How To Measure the True ROI of Branding — Huddle Creative
2. What Is Branding ROI? - Forbes
3. How to Measure Employer Branding ROI Effectively - LinkedIn
4. The Branding ROI: Unleashing the Power of Brand Identity
5. How to Measure the ROI of Branding - a Free Report | Push10