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Competitors are gaining ground. The look and feel of products within your company’s portfolio needs a refresh. Employees are uninspired and disengaged. Your brand has outgrown (or underutilised) its current identity or positioning. Whether the realisation came about as a result of formal analysis or your personal observations, you know your brand isn’t working hard enough for your business—and something has got to change.
However, to make the kinds of changes that will drive your business forward, you also know that investment and support from the top of your organisation will be required. As you prepare to make the business case for brand change, you will probably have questions to answer:
Answering these questions requires a very diverse set of skills, from developing strategy to consumer research, analytics and financial modelling, determining the investment required and, crucially, the articulation of a compelling case. It requires a holistic view of a brand that can connect the dots between the way your brand functions, how its expression influences customer perceptions and behaviours and, ultimately, how the strength of your brand impacts financial performance.
By bringing together market, brand, competitor, and financial data, the Interbrand brand valuation model provides a framework within which strategic options can be assessed and business case modelling conducted. In addition to brand value, business case modelling will include estimates of top and bottom line improvements, as well as expected changes in business value.
To fully harness the power of your brand to drive choice, win loyalty and command a premium, specialist skills must be brought together and combined with a strategic overview. The goal, of course, is to secure future earnings and increase market share, but to arrive there, your brand must stay relevant. What will the future look like? Is the total experience of your brand one that is likely to create identification, differentiation and value next quarter, next year, or five years from now? Knowing how your brand impacts financial results is critical to maximising brand and business value and staying competitive—and profitable—in the long-term.
Many firms claim to be able to evaluate strategic branding options. However, very few have the range of skills needed to tie the impact of branding to financial results (and therefore brand and business value). In order to do this, you must first establish the key value drivers for the business.
In the telecom sector, for example, the biggest driver is typically subscriber turnover or churn, but ARPU (average revenue per user) and subscriber acquisition rates are also important. In financial services, the drivers include customer numbers, average products per customer, or balance on account. In the automotive sector, the drivers are typically unit sales volumes, average selling price and dealer incentives.
To fully appreciate how value is generated, it is critical to understand the relationship between brand perceptions and the value driving customer behaviours we want to model. Using retail as an example, if we are able to create a more engaging in-store experience, we can expect that customers will spend more time shopping and enjoying the atmosphere. When encouraged to experience a retail environment at their leisure, customers tend to purchase more and potentially higher-value items. However, in order to gain any real advantage regarding revenue generation, it’s not enough to know that this sort of change is generally beneficial—you need to know how to make it happen and exactly where you might need to invest.
Before committing resources to brand changes, businesses want to know if the changes will be worth making and what the nature of those changes might be. To that end, a range of research and analytical techniques are available to help organisations better understand the connections between customer perceptions and value driving behaviours. At Interbrand, we deepen our understanding of these relationships by connecting existing data from across the business (such as data from market research, CRM, and financial systems) and also commissioning new research (which may involve testing new concepts or brand propositions).
Once research and testing have helped identify what kinds of changes might be necessary and how the brand might benefit from implementing them, a commitment to invest is the next step. In most cases, upfront investment is usually needed to get improvements underway. This may also be followed by ongoing operational costs to, for example, deliver certain hallmark experiences to support a revitalised brand proposition.
To help inform decision-making and make the case to upper management and the board for investment, we examine the variables in a financial model of the business, compare the potential upside with the cost to deliver, present strategic options for brand change, and show how each approach is expected to impact brand and business value (See Figure 1).
Building an authentic, relevant and differentiated brand to drive enhanced business performance.
Interbrand was engaged by an upmarket hotel brand with a smaller global footprint relative to key competitors like Hilton and Marriott, meaning that its brand needed to work harder to attract and retain customers worldwide.
After assessing the hotel chain’s objectives and the competition it was facing, we knew we needed to address a number of key areas to strengthen the brand:
At the time, the brand was perceived as a business traveller-focused chain. However, our analysis identified clear space and opportunity in the marketplace: a niche between high-end luxury hotels like
Ritz-Carlton and Four Seasons and large business-focused chains like Hilton and Hyatt. We also felt that the brand had the potential to offer something different, a luxurious yet accessible alternative for those who would be travelling for business as well as pleasure.
We conducted extensive market research and found what really distinguished the brand’s target audience was their attitude to travel:
What these globe-trotters (or aspiring globe-trotters) ultimately had in common was a heightened level of sophistication—they wanted to be “in the know.” It was this key insight that inspired our brand proposition.
We wanted to ensure that the hotel chain became the go-to brand for people who wanted to be in the know, and help establish the proposition and strategy for a hospitality brand that went out of its way to deliver authentic and enriching experiences that make the traveller’s world feel bigger, and the journey more rewarding.
To figure out where the new brand proposition would have the biggest customer impact, we employed quantitative touch point analysis (see Figure 2). While “value” turned out to be the most significant driver of overall customer advocacy, staff and in-room experience were also very influential factors.
Once we had a clear sense of what was driving customer preferences and perceptions, we then examined the relationship between customer advocacy and hotel performance. Through this analysis, we were able to demonstrate how our suggested brand proposition and strategy would not only improve customer experience, but also increase bottom-line profit (by tens of millions of dollars).
With a strong financial case as the foundation for our recommendations, we developed a strategy and creative execution for each of the most impactful touchpoints. Starting inside the organisation, we created an internal branding engagement and communication program to build understanding and excitement among employees for the new proposition. To deliver a higher level of personal attention, a locally-tailored concierge concept was developed on-site and online.
Building on the new proposition, we also created a philosophy for room design and experience that provided a real sense of location inside the room including, for example, local intelligence guides and TV welcome imagery. Today, this concept has been taken even further. Tapping into their target market’s love for travel and cultural curiosity, the hotel invites visitors to explore the world through cuisine by offering a culinary mobile app that features the hotel’s chefs in various regions sharing local recipes and engaging the senses. The impact? The first year post-launch saw a 10% increase in brand consideration among the target audience, revenue per room increased 12%, and the hotel owner’s share price rose by 26%. 
