Brand performance: how to speak "creative" to the numbers people
It's hard to justify spend on branding & marketing to your CEO or CFO - especially when the company is still in its early stages.
Other than performance ads (which is about as scientific marketing as you can get), anything without a spreadsheet full of data is often dismissed as expensive and unnecessary fluffy stuff by the purse string holders.
We get it. As a startup marketing agency, we know that when a business is just starting out, it's in pure survival mode. It's focusing on just getting from one day to the next, which means customer acquisition is like OXYGEN.
The longer the business is around, though, the easier it is to start thinking longer-term.
Startups go from thinking about tomorrow, to next week, to next month, until they finally reach a more mature "scale-up" status and can start planning out quarters - and even years - in advance.
What's this got to do with justifying marketing budgets for anything other than performance? Well, a lot actually...
The marketing "greats" - Mark Ritson, Peter Field, Les Binet, Rory Sutherland... all talk about the careful balancing act of short-term wins versus long-term brand-building. A concept dubbed "the long and short of it" in Les Binet and Peter Field's study, this is the artful blend of direct impact campaigns - like a promotion to temporarily boost sales - and the longer-term brand-building.
The latter has always been harder to justify because it takes time to see results, it is slightly harder to measure, and typically gets dismissed into the "fluffy" pile of marketing.
But what's fluffy about a $408 billion brand valuation?
That's how much Apple is worth today, according to Interbrand.
A strong brand only delivers the good stuff - better campaign effectiveness, longer retention rates, higher customer lifetime value, stronger brand advocacy, and much higher profitability.
What's not to love?
"Having a strong brand means you get to play the game of capitalism in "easy mode"' - Matt Johnson, Branding That Means Business
The thing is, we need to speak the CEO/CFO's language.
Marketers, as we already know, need to adapt their messaging depending on particular audience segments. Some benefits are more compelling than others, so hitting your customers with the right message at the right time is crucial to get that cut-through, and make them take action.
The same can be said of internal stakeholder management.
The finance folks talk in numbers, so, below is a selection of our favourite brand performance statistics to help you make your case for very un-fluffly, important brand-building marketing:
Continuous brand development and adhering to the strategic direction is vital for business success. Consistent presentation of a brand has been seen to increase revenue by 33%. (Lucidpress, 2019. Source: https://www.oberlo.co.uk/blog/branding-statistics)
The path to profit is tripled with the presence of a strong brand - meaning you can literally grow 3X faster. (Source: https://clutch.co/agencies/branding/resources/how-brand-can-increase-profitability)
Emotionally-connected customers have a 306% higher lifetime value than those without. (Source: https://findstack.com/branding-statistics/ - In 2018, Motista collected data from 100,000 customers over three years (2016-2018). The report says that the more a customer feels connected with a brand emotionally, the more they spend. Some going for twice as much as the average customer. Their lifetime value is higher at 306%, they tend to stick with the brand for an average of 5.1 years, and will recommend the brand at a higher rate at 71%.
Businesses with strong brands can - theoretically - enjoy practically unlimited profit margins. Look at Chanel, the world's most covetted luxury brand. Their most expensive handbag sold at auction for $107,000. Shein has a similar bag on sale at the time of writing for £5.75. (Source: https://www.sothebys.com/en/articles/the-most-expensive-chanel-bag-ever-sold-at-auction-karl-lagerfelds-prized-possession#:~:text=The%20auction%20opened%20with%20one,bag%20ever%20sold%20at%20auction.)
More realistically, businesses with a strong brand can achieve anywhere between 30% and 500% higher profit margins than those without. (Source: https://clutch.co/agencies/branding/resources/how-brand-can-increase-profitability#:~:text=Brands%20with%20strong%20reputations%20offer,profits%203x%20faster%20than%20competitors).
And if all else fails, ask them what ketchup they pick up in the supermarket aisle.
Remember, we're all consumers of someone else's brand ;)
Bloom is the UK tech industry's favourite agency. If you're looking to build your challenger brand, or take your startup to sophisticated scale-up status, then book a no-obligation, 30-minute call with us here.