Establishing a Brand Scorecard

1. Establishing a Brand Scorecard ESTABLISHING A BRAND SCORECARD HOW-TO GUIDE

2. 2 Establishing a Brand Scorecard How-to Guide This report has been designed to provide practical advice for benchmarking and improving your branding capabilities. Read this brief report to learn: Read this report to learn how to prepare your organization for effective brand management. Use our tools to develop a Brand Scorecard that demonstrates increased Customer-Base Value. HOW-TO GUIDE Brand Management Defined Principles of a Strong Brand What is Brand Equity? Capabilities Required to Measure Brands Establishing a Brand Scorecard Establishing a Brand Scorecard Brand management is the application of marketing techniques to a specific product, product line, or brand. It seeks to increase the product’s perceived value to the customer and thereby increase brand franchise and brand equity. Marketers see a brand as an implied promise that the level of quality people have come to expect from a brand will continue with present and future purchases of the same product. This may increase sales by making a comparison with competing products more favorable. It may also enable the manufacturer to charge more for the product. The value of the brand is determined by the amount of profit it generates for the manufacturer. This results from a combination of increased sales and increased price. Brand Management Defined 2 Establishing a Brand Scorecard How-to Guide This report has been designed to provide practical advice for benchmarking and improving your branding capabilities. Read this brief report to learn: Read this report to learn how to prepare your organization for effective brand management. Use our tools to develop a Brand Scorecard that demonstrates increased Customer-Base Value. HOW-TO GUIDE Brand Management Defined Principles of a Strong Brand What is Brand Equity? Capabilities Required to Measure Brands Establishing a Brand Scorecard Establishing a Brand Scorecard Brand management is the application of marketing techniques to a specific product, product line, or brand. It seeks to increase the product’s perceived value to the customer and thereby increase brand franchise and brand equity. Marketers see a brand as an implied promise that the level of quality people have come to expect from a brand will continue with present and future purchases of the same product. This may increase sales by making a comparison with competing products more favorable. It may also enable the manufacturer to charge more for the product. The value of the brand is determined by the amount of profit it generates for the manufacturer. This results from a combination of increased sales and increased price. Brand Management Defined

3. 3 Establishing a Brand Scorecard How-to Guide Proctor & Gamble PLC pioneered the concept of Brand Management as a result of a memo sent by Neil H. McElroy. Following are principles of a strong brand: Principles of a Strong Brand Distinguished - is your brand “premium” or “economy”? Does your brand express the brand type adequately? Enhance Image - does your brand accurately reflect and enhance the corporate/product image? Benefit/Usage - does your brand describe the benefits of your product, or how it is used? (i.e. Mr. Clean) Simple - is your brand recognizable and memorable? Protectable - can you legally protect your brand? Customer Retention Rate Net Present Value for Each Customer Brand Awareness & Preference Corporate/Product Image Purchasing Intentions Customer Satisfaction Customer Referral Rates Brand Equity can be defined as the value measurement associated with expected future revenues for the branded product. Many organizations use a Brand Scorecard in conjunction with a Marketing Dashboard to measure their return on marketing investments. The metric that can be used to measure overall Brand Equity is Customer-Base Value. Customer-Base Value (CBV) - the total number of customers multiplied by the net present value of those customers (gross profit contribution) over their average lifetime. Factors that influence the Customer-Base Value metric include: What is Brand Equity? 3 Establishing a Brand Scorecard How-to Guide Proctor & Gamble PLC pioneered the concept of Brand Management as a result of a memo sent by Neil H. McElroy. Following are principles of a strong brand: Principles of a Strong Brand Distinguished - is your brand “premium” or “economy”? Does your brand express the brand type adequately? Enhance Image - does your brand accurately reflect and enhance the corporate/product image? Benefit/Usage - does your brand describe the benefits of your product, or how it is used? (i.e. Mr. Clean) Simple - is your brand recognizable and memorable? Protectable - can you legally protect your brand? Customer Retention Rate Net Present Value for Each Customer Brand Awareness & Preference Corporate/Product Image Purchasing Intentions Customer Satisfaction Customer Referral Rates Brand Equity can be defined as the value measurement associated with expected future revenues for the branded product. Many organizations use a Brand Scorecard in conjunction with a Marketing Dashboard to measure their return on marketing investments. The metric that can be used to measure overall Brand Equity is Customer-Base Value. Customer-Base Value (CBV) - the total number of customers multiplied by the net present value of those customers (gross profit contribution) over their average lifetime. Factors that influence the Customer-Base Value metric include: What is Brand Equity?

4. 4 Establishing a Brand Scorecard How-to Guide Capabilities Required to Measure Brands 1. Senior Management Commitment - it is critical that Branding is viewed as a strategic endeavor and is driven top-down from the C-level. Otherwise, investments to strategically improve brand equity will not be approved. 2. Internal Brand Alignment - have you conducted an internal brand survey? Since much of branding takes place during conversations and via email, you need to know how your employees view the organization. If there is a gap between senior management’s and front- line customer service’s view, it needs to be resolved. 3. Market Research Data - do you have any empirical data that demonstrates customer/market segment preferences, satisfaction, referral rates, purchasing intentions, and other important market research data. 4. Data Management - you need to be able to collect and manipulate marketing metrics and find causal links that connect them to high-level business metrics. For help in this area, read our report on Marketing Dashboards. 5. Systems & Technology - once you have built the discipline to collect the relevant brand equity data, consider housing your data in systems such as Customer Relationship Management (CRM), Enterprise Resource Planning (ERP), or other enterprise applications. Next, use these applications to generate reports such as “total number of customers”, “net present value of current customer base”, or other brand equity reports. 6. Brand Goals, Objectives, & KPIs - once you have the information, systems, and skills required to measure your brand effectively, take the time to strategically plan for brand improvements. Take a Balanced Scorecard approach to brand measurement by selecting specific Object- ives, Measures, Targets, and Initiatives. Brands are intangible assets that are difficult to measure. That being said, it is not impossible for an organization to benchmark and demonstrate improvements to brand equity for a reasonable cost. If you do not have much experience with Branding and have a strategic imperative to meas- urably improve your brand, consider getting help from a consultant. Based on the best practices described in this report, and tools provided, you should be able to get started with a branding program. If you need more clarity, contact your Research Associate who can provide you with more tailored advice. Bottom Line 4 Establishing a Brand Scorecard How-to Guide Capabilities Required to Measure Brands 1. Senior Management Commitment - it is critical that Branding is viewed as a strategic endeavor and is driven top-down from the C-level. Otherwise, investments to strategically improve brand equity will not be approved. 2. Internal Brand Alignment - have you conducted an internal brand survey? Since much of branding takes place during conversations and via email, you need to know how your employees view the organization. If there is a gap between senior management’s and front- line customer service’s view, it needs to be resolved. 3. Market Research Data - do you have any empirical data that demonstrates customer/market segment preferences, satisfaction, referral rates, purchasing intentions, and other important market research data. 4. Data Management - you need to be able to collect and manipulate marketing metrics and find causal links that connect them to high-level business metrics. For help in this area, read our report on Marketing Dashboards. 5. Systems & Technology - once you have built the discipline to collect the relevant brand equity data, consider housing your data in systems such as Customer Relationship Management (CRM), Enterprise Resource Planning (ERP), or other enterprise applications. Next, use these applications to generate reports such as “total number of customers”, “net present value of current customer base”, or other brand equity reports. 6. Brand Goals, Objectives, & KPIs - once you have the information, systems, and skills required to measure your brand effectively, take the time to strategically plan for brand improvements. Take a Balanced Scorecard approach to brand measurement by selecting specific Object- ives, Measures, Targets, and Initiatives. Brands are intangible assets that are difficult to measure. That being said, it is not impossible for an organization to benchmark and demonstrate improvements to brand equity for a reasonable cost. If you do not have much experience with Branding and have a strategic imperative to meas- urably improve your brand, consider getting help from a consultant. Based on the best practices described in this report, and tools provided, you should be able to get started with a branding program. If you need more clarity, contact your Research Associate who can provide you with more tailored advice. Bottom Line

5. 5 Establishing a Brand Scorecard How-to Guide Action Plan STEP 1 - Consensus 3 Research 1 Consensus 7 Timeframe 8 Brand Scorecard 9 Benchmark 10 Compare 6 Define Success 4 Objectives 2 Existing Data 5 Specific Targets Creating a simple Brand Scorecard does not have to be as intimidating as it may sound. This section will outline the steps required to build an effective tool to measure your brand. Have a meeting with key brand stakeholders to ensure you have alignment on your corporate mission, vision, values, etc. Use our Brand Selection Tool for assistance. Achieve Brand Consensus Brand Selection Tool V I E W R E S O U R C E 5 Establishing a Brand Scorecard How-to Guide Action Plan STEP 1 - Consensus 3 Research 1 Consensus 7 Timeframe 8 Brand Scorecard 9 Benchmark 10 Compare 6 Define Success 4 Objectives 2 Existing Data 5 Specific Targets Creating a simple Brand Scorecard does not have to be as intimidating as it may sound. This section will outline the steps required to build an effective tool to measure your brand. Have a meeting with key brand stakeholders to ensure you have alignment on your corporate mission, vision, values, etc. Use our Brand Selection Tool for assistance. Achieve Brand Consensus Brand Selection Tool V I E W R E S O U R C E

6. 6 Establishing a Brand Scorecard How-to Guide Action Plan STEP 2 - Existing Data 3 Research 1 Consensus 7 8 9 10 6 4 2 Existing Data 5 Track down any previous market research data, customer satisfaction surveys, and customer data such as: # of customers, average lifetime, average profit/ customer, net present value of current customer base, market share, etc. Dig up Historical Information Objectives Specific Targets Define Success Timeframe Brand Scorecard Benchmark Compare 6 Establishing a Brand Scorecard How-to Guide Action Plan STEP 2 - Existing Data 3 Research 1 Consensus 7 8 9 10 6 4 2 Existing Data 5 Track down any previous market research data, customer satisfaction surveys, and customer data such as: # of customers, average lifetime, average profit/ customer, net present value of current customer base, market share, etc. Dig up Historical Information Objectives Specific Targets Define Success Timeframe Brand Scorecard Benchmark Compare

7. 7 Establishing a Brand Scorecard How-to Guide Action Plan STEP 3 - Research 3 Research 1 7 8 9 10 6 4 2 Existing Data 5 If you don’t have much information to go from, consider doing a small market research project to set benchmarks for brand awareness, preferences, purchasing intentions, etc. Gather New Information Consensus Objectives Specific Targets Define Success Timeframe Brand Scorecard Benchmark Compare 7 Establishing a Brand Scorecard How-to Guide Action Plan STEP 3 - Research 3 Research 1 7 8 9 10 6 4 2 Existing Data 5 If you don’t have much information to go from, consider doing a small market research project to set benchmarks for brand awareness, preferences, purchasing intentions, etc. Gather New Information Consensus Objectives Specific Targets Define Success Timeframe Brand Scorecard Benchmark Compare

8. 8 Establishing a Brand Scorecard How-to Guide Action Plan STEP 4 - Objectives 3 Research 1 7 8 9 10 6 4 Objectives 2 5 Your goals may be to improve C-level awareness of a specific product, to achieve commitment to brand values from customer-facing representatives, or increase understanding of value propositions amongst specific media sources. Set Branding Goals & Objectives Consensus Existing Data Specific Targets Define Success Timeframe Brand Scorecard Benchmark Compare 8 Establishing a Brand Scorecard How-to Guide Action Plan STEP 4 - Objectives 3 Research 1 7 8 9 10 6 4 Objectives 2 5 Your goals may be to improve C-level awareness of a specific product, to achieve commitment to brand values from customer-facing representatives, or increase understanding of value propositions amongst specific media sources. Set Branding Goals & Objectives Consensus Existing Data Specific Targets Define Success Timeframe Brand Scorecard Benchmark Compare

9. 9 Establishing a Brand Scorecard How-to Guide Action Plan STEP 5 - Specific Targets 3 1 7 8 9 10 6 4 2 5 Specific Targets This part of your scorecard deals with HOW you are going to achieve your goals & objectives. For example, you may wish to target the Sales & Service organizations to improve collateral, presentations, scripts & messaging. You might want to target All Employees with a brand revitalization effort. Determine Specific Targets & Actions Consensus Existing Data Research Objectives Define Success Timeframe Brand Scorecard Benchmark Compare 9 Establishing a Brand Scorecard How-to Guide Action Plan STEP 5 - Specific Targets 3 1 7 8 9 10 6 4 2 5 Specific Targets This part of your scorecard deals with HOW you are going to achieve your goals & objectives. For example, you may wish to target the Sales & Service organizations to improve collateral, presentations, scripts & messaging. You might want to target All Employees with a brand revitalization effort. Determine Specific Targets & Actions Consensus Existing Data Research Objectives Define Success Timeframe Brand Scorecard Benchmark Compare

10. . 10 Establishing a Brand Scorecard How-to Guide Action Plan STEP 6 - Define Success 3 1 7 8 9 10 6 Define Success 4 2 5 Like all objectives, you need to determine how success will be measured, BEFORE you kick-off your initiative. These are the Key Performance Indicators (KPIs) that will be monitored to demonstrate improvement. Using Primary and Secondary success measures will help you differentiate subtle improvements within a specific target area. Define Measures of Success Consensus Existing Data Research Objectives Specific Targets Timeframe Brand Scorecard Benchmark Compare

11. . 11 Establishing a Brand Scorecard How-to Guide Action Plan STEP 7 - Timeframe 3 1 7 Timeframe 8 9 10 6 4 2 5 You last step is to break the larger, overarching goals into more manageable pieces. If you are targeting Sales to use a new presentation deck, set a goal like: “have 50% of sales team using new presentation deck by June 1st, 2007.” Establish Goal Timeframe Consensus Existing Data Research Objectives Specific Targets Define Success Brand Scorecard Benchmark Compare

12. . 12 Establishing a Brand Scorecard How-to Guide Action Plan STEP 8 - Brand Scorecard 3 1 7 8 Brand Scorecard 9 10 6 4 2 5 Now that you understand each step of the process, use Demand Metric’s customizable Brand Scorecard Tool to create your own framework. Build your Brand Scorecard Brand Scorecard Tool V I E W R E S O U R C E Consensus Existing Data Research Objectives Specific Targets Define Success Timeframe Benchmark Compare

13. . 13 Establishing a Brand Scorecard How-to Guide Action Plan STEP 9 - Benchmark 3 1 7 8 9 Benchmark 10 6 4 2 5 Take a snapshot of your current Customer-Base Value and other brand-related metrics to set a stake in the ground. Benchmark Current Brand Score Consensus Existing Data Research Objectives Specific Targets Define Success Timeframe Brand Scorecard Compare

14. . 14 Establishing a Brand Scorecard How-to Guide Action Plan STEP 10 - Compare 3 1 7 8 9 10 Compare 6 4 2 5 Revisit your Brand Scorecard quarterly and report on the success of your initiatives to demonstrate effectiveness. Demonstrate Brand Scorecard Improvement Consensus Existing Data Research Objectives Specific Targets Define Success Timeframe Brand Scorecard Benchmark

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