A comprehensive brand strength assessment scorecard that accounts for brand investment and performance, and ultimately commercial success.
Our brand evaluation framework - the Brand Strength Index (BSI) - is based on the principles outlined in our article Measuring Brand Equity and Why Brand Evaluation Is An Important Management Practice. The framework has core consistency but is tailored where necessary to reflect the specific brand or category dynamics.
Brand Strength Index (BSI) - How it Works
Each brand is assigned a Brand Strength Index (BSI) score out of 100, which is determined based on performance on a broad range of input and output metrics. A typical example is shown here:
This example is purely illustrative – the actual model must be carefully constructed to reflect all elements which are likely to affect brand success. But the starting point is a strong measurement framework, backed by compelling empirical evidence outlining the links between brand investment and performance, and ultimately commercial success.
Benefits of the Brand Strength Index (BSI)
Having a broad framework and set of principles in place brings a number of benefits:
- Confidence: That the measures are meaningful, commercially relevant and actionable.
- Efficiency: management time is focussed only on the necessary category or organisation-specific customisation.
- Consistency: Data sources are identified in advance, and consistent.
- Stronger benchmarking and insight: Consistency of KPIs provides robust benchmarking, and better insight because the speed and magnitude of trends is interpreted more clearly.
- Communications: Clearer communication of results.
- Brand Commercialisation: Where required, hard evidence to use in licencing/sponsorship negotiations, and in addressing internal brand architecture debates.
This type of evaluation framework obviously meets the fundamental objective of providing marketing and senior management with a comprehensive dashboard of brand performance and progress against strategic goals – but it goes much further. Analysing brands using this framework allows us to track the links between activity, brand equity, behaviour and financial performance:
Outputs are fed into strategic plans and help develop the commercial case for brand investment. Further applications include:
- Internal Tracking: Corporate, team and personal target-setting, including incentivisation and reward
- Partner Conversations: Ammunition for retailer/dealer support and other external discussions.
- Scenario planning
Role of ISO and Development of ISO:20671
As mentioned above, ISO has developed (with our input) the first-ever global standard on brand evaluation – ISO:20671.
This standard sets out a rigorous framework and set of principles for conducting brand evaluation from an input/output point of view. As such it is intended to serve as the standard for the development and implementation of other standards for brand evaluation - and in addition, aligning to the international standard of brand valuation – i.e. ISO 10668.
The standard contains several elements. It sets out a brand evaluation framework, conceptually similar to those used by Brand Finance and some other organisations, incorporating both brand inputs and outputs.
The framework outlines the concept of brand strength, which, as Brand Finance advocates, is a broader assessment than pure brand equity measurement. (Hence, the Brand Finance BSI approach is compliant with ISO 20671)
ISO 20671 also outlines the fundamental principles of brand evaluation, including the need to take into account:
- A range of input measures: including marketing investment, innovation/R&D, distribution, etc.
- External factors: such as economic and political conditions
- Brand strength: qualitative/subjective assessments from customers and other stakeholders
- Performance measures: including sales, market share, margins, etc.
In this respect, a comprehensive check-list of possible elements and dimensions is outlined, although ISO stresses (as do we) that measures and dimensions have to be customised somewhat depending on the brand and category: “Applicable indicators should be determined e.g. according to company size, particular type of brand, purpose of the brand evaluation, different external regulating environment.”
ISO goes further than many best-practice discussions through its consideration of the brand evaluation process, and not just the content/data and analytic approach. Specific principles outlined are:
- The need for a suitably experienced ‘brand evaluator’ (whether internal or external), at least to design and set-up an evaluation system (if not actively manage it)
- Obligations of the brand evaluator, including the need for transparency, consistency and objectivity. More specifically, the standard outlines the importance of justifying the inclusion (or exclusion) and weight given to specific measures – measurements must not be based around vague or personal choice or the views of a ‘committee’.
- A clear understanding of the role and impact of different stakeholders on brand strength and outcomes, and the need for evaluation measures to take this into account.
- An audit process to confirm “the integrity of the brand evaluation system, its compliance with this international standard and/or reviews whether the brand evaluation practices of the entity are effectively implemented and maintained”.
- The need to ensure that required data inputs are available and of sufficient quality.
Overall, ISO 20671 provides a welcome set of standards and best-practice checklists which all organisations would benefit from following. It is imperative that brand owners assess the extent to which their evaluation system follows the best-practice principles of the ISO standard. While many larger organisations are likely to be compliant with most aspects of the standard – even within some of the biggest branding operations globally it is not unusual to find evidence of corner-cutting and inconsistency (for smaller/niche brands, segments, and markets, for example).
The Marketing Accountability Standards Board (MASB)
Marketing Accountability Standards Board (MASB) is an industry body established to establish standards and processes necessary for evaluating marketing measurement in a manner that “ensures credibility, validity, transparency, and understanding”.
MASB is a participant in the development of the ISO but had in addition outlined brand evaluation standards and processes which are valuable contributions to the marketing discipline. Of particular relevance is the Marketing Metric Audit Protocol (MMAP) - a formal process for assessing the robustness of brand metrics, and the extent to which these are indicative of the impact of marketing activities on the financial performance of the brand owner.
It includes the conceptual linking of marketing activities to intermediate marketing outcome metrics and in turn to commercial outcomes, as well as an audit as to how the metrics meet the validation & causality characteristics of an ideal metric.
As part of this programme, MASB has carefully audited the conceptual framework and rigour of a number of leading research/evaluation agency systems (including Brand Finance), and in 2016 published “Accountable Marketing”, considered to be one of the definitive texts on marketing and brand evaluation.
A Brand-owner’s Checklist
Does your organisation have a brand evaluation system that provides a comprehensive measure of brand health and progress? Some key steps every brand-owner should take:
- Identifying roles and responsibilities – who is responsible for brand evaluation, and ensuring the overall system is fit for purpose?
- Ensure that the overall conceptual framework is comprehensive and predictive of brand growth and commercial success
- Developing & reviewing the measurement framework – are all relevant brand inputs, equity dimensions, and outputs covered?
- Identifying/reviewing data sources. For existing programmes, this includes cutting irrelevant data and scoping out additional research or data needs
- Determining the links between marketing activities and brand strength, and between brand strength and commercial value (sales, profits, brand value)
- Establishing appropriate measurement and reporting frequencies, and ensuring that measures are updated appropriately
- Determining a reporting hierarchy and system
- Ensuring the system is correctly used as a benchmark for performance and input into brand strategy
But the rewards are considerable – the entire organisation benefits from clear measures of performance and the impact of business actions upon the brand. Hence, as brands account on average for 20% business value, an effective evaluation programme pays for itself, by outlining a roadmap towards stronger, more resilient, and ultimately more profitable brands. As Warren Buffet points out, a strong brand ensures that strong commercial performance is enduring and resilient to competitive attack:
…all the time, if you’ve got a wonderful castle, there are people out there who are going to try and attack it and take it away from you. And I want a castle that I can understand, but I want a castle with a moat around it.
Warren Buffett, CEO of Berkshire Hathaway
Brand owners must develop effective programmes and processes to evaluate the strength and performance of their brands. There are good checklists of good practice available, including ISO 20671 – but these can only ever be a guide. Professional expertise and an understanding of business goals and purchasing patterns/dynamics will always be required; there is no such book as ‘Brand Evaluation for Dummies’.
Hence even the most sophisticated branded enterprises will acknowledge challenges of brand evaluation – and the need for constant review and improvement (of the evaluation process) without tinkering for its own sake.