When you’re making decisions for a business, it’s important to track how successful they are generating a return. If you’re spending resources on something that doesn’t make money, then it might be a bad choice – one you need to reassess.
What makes this way to assess your difficult is that some parts of your business don’t generate money in a clear cut way: this is an easy way to assess sales initiatives, marketing, product launches and the performance of front line staff, but if you’re going to bring this philosophy to your whole business, you’re going to need to develop a more subtle understanding of how the different parts of your business make an impact on your bottom line. A good customer service department may have to make semi-frequent refunds, costing you money in a direct way, but you need to find a way to measure the refunds they don’t make, by resolving the situation, and the customers whose business they retain by finding solutions.
Similarly, brand building takes a lot of investment, but it can be difficult to quantify exactly how it’s repaying that investment: your brand has a holistic effect on your business – it affects all of it, which means it can be tricky to work out which returns you can ascribe to the resources you’ve spent on it. If you’re basing your assessment of success on ROI brand awareness has to be a part of it.
There are several metrics you can use to measure the impact of your brand on your revenue, but one of the most important is ‘brand uplift’ – the value your brand imparts to your products and marketing. If your brand doesn’t make your products more tempting, more attractive, more fundamentally valuable then your money is wasted, so it’s vital to track this.
You can measure your brand uplift with some simple A/B testing. You’ll need to create two versions of some recent marketing: one with all your branding safely intact and one genericised version: with none of your distinctive logos, fonts or design elements. If you launch these two ads to select digital audiences and track the results – which you can quantify as clicks and sales – you should see that the branded ad performs better. The additional actions generated by the advert with your branding is a measure of your brand uplift, and demonstrates the effect your brand building efforts have on the revenue you’re taking in.