Brand Value OnlineBY ARA Retail Institute
Brand value is a key consideration of online retailers. How to determine, establish and measure brand value are questions of importance to retailers wishing to benchmark their business and ascertain its strength as related to other players in the sector.
Determining Brand Value
In order to measure the ongoing brand value in an online context, it is essential to determine brand position and brand equity. These depend on customer awareness and perceived quality or other attributes that encourage loyalty and brand associations.
Online brand value can be measured by the:
- Number of Visitors
- Volume of Purchases
Some other subtle factors should also be taken into account, including the evaluation of data on:
- Source of traffic
- Duration of visit- higher value where the customer stays longer
- Banner click-through rates
- Payments for traffic into and out of the site
- Level of market intelligence on trends in customer behaviours
- Association of brand(s) with other strong brands
- Customer relationship management, especially service support and order satisfaction levels.
The major determinant of long-term brand value remains constant; brands have to move with the customer. Effective multichannel branding has more to do with the ability to be agile and move with customers and less about new brands and new technologies to communicate brands.
Assessing Brand Position and Value
Indicators can be set to measure long-term brand value. Examples of where indicators may be set include:
- Level of commitment to the brand by customers
- Loyalty of customers when measured given different variables – price changes, quality changes
- Associated selling – who customers tell about the brand, what brands do they link to another brand
In setting indicators we want to know:
- How does brand loyalty relate to brand equity?
- How can we leverage greater sales volume?
- What is the price premium for the brand?
- How do we retain and seek more customers?
In reviewing the brand, company management wish to determine:
- How can we make the product or service unbeatable?
- How can we make our service and sales processes immune to major competitor activities or seasonal market trends?
- What incentives promote repeat purchase?
- What do customers really want today and in the future?
- How do customers segments’ behaviours differ?
- How do we better reach existing customer and non-customers?
- How do our customers become advocates for our brand?
Establishing an Online Budget
Many retailers when first considering an online presence have little awareness of the investment required to ensure success. When setting a budget for developing a brand online, the following expenses need to be taken into account:
- Offline promotion – such as promoting web address in existing marketing material and on paperwork
- Site positioning – ensuring the website can be found easily by internet users searching for the company or particular brands
- Paid promotion online – paying search engines to present your website whenever an internet user searches for certain terms
- Email promotion – promoting web presence and sales channels
- Site costs – development, maintenance, hosting, content
- Staff time – responding to emails or online enquiries, updating information and price lists, learning new skills, liaison with web developers
- Fees paid to third parties that find customers
Measuring Online Success
Brand valuation is regarded by many marketers as potentially offering the long-elusive definitive “proof” of the business value of marketing’s brand-focused efforts. Unfortunately, achieving a viable measure of brand value has proven to be just as elusive.
More than ever before, today’s marketers are finding themselves increasingly responsible for demonstrating the financial outcomes of their brand strategies and initiatives. Brand valuation has generated much discussion inside and outside of the marketing community as a possible means to this end.
While brand valuation may at first glance appear to be a promising, finance-centric approach to measuring marketing impact, it is not without significant risk. The process of establishing a credible value for an intangible asset such as a brand is rife with thorny issues of definition, methodology, repeatability, and consistency. When considering brand valuation, keep the following in mind:
- Develop a specific definition of brand valuation relevant to your organisation.
- Create a framework that represents your organisation’s view of how brand value drives financial outcomes, e.g.: a. increased pricing leverage b. increased customer loyalty c. increased purchase frequency
- Engage stakeholders within and outside of marketing to ensure the brand valuation definition and framework have sufficient credibility and viability throughout the organisation. In this process, be open to alternative approaches that may prove easier to implement and that resonate more readily with senior management and finance.
When brands reach the tipping point where sales begin to slide because customers no longer resonate with the brand’s value proposition, it’s time to put your finger on the pulse of your brand and determine the long-term outlook for brand health.
A comprehensive brand audit will often reveal new grow opportunities for your brands, and new ways to make your brand resonate with a new generation of target customers who will represent your brand’s bigger future.
If you believe your brand could use a check-up, take the time to make a close examination of the strengths, weakness, opportunities and threats facing brand health. A comprehensive brand audit will include a thoughtful examination of the following:
- External Partners and Customers
This includes distribution channel partners, independent sales reps, strategic supplier partners and most importantly customers. Using social media tools is a very effective way to monitor brand health with partners and customers.
- Internal Stakeholders
Gaining deep insight and understanding of how all stakeholders within your organisation perceive the brand’s value proposition and meaning is important because they’re in direct contact with customers; and it’s equally important for management, product development, manufacturing and other groups within the organisation to have a clear picture of what the brand stands for.
Since your brand doesn’t live in a vacuum, it’s often instructive to compare its image, message and product or service scope within the competitive landscape. Take a deep, long look into their new product initiatives, programs and value-added services. The key is not to benchmark, but to differentiate your brand.
- Brand Positioning
What does your brand promise? Is this promise still important to customers? Does your brand matter to the high value customer that represents the brands bigger future? Does it reflect a highly valued competitive advantage not in abundant supply elsewhere?
- Brand Identity
Do customers know what your brand stands for? The brand audit provides the reality check on just how well the essence or personality of the brand is resonating.
- Brand Equities
It’s critical to gain quantifiable insight on important metrics like brand awareness, purchase behaviours, attitudes, values, market share, and customer life value.
- Brand Architecture
Brand architectures can get out of completely out of alignment over time. Take the time to reflect on how your brand is portrayed at the Master Brand level, and if it confuses or encourages clarity at the Product or Sub-Brand level. Also check that there is no confusion between the Corporate Brand or other attribute brands or branded features.
When brand managers think about consistency in marketing communications, they often think only about visual consistency. Go one step deeper: what does your brand actually say? What are the primary and secondary messaging platforms that guide consistent marketing communications?
- Budgeting/Resource Allocation
It’s vital for an organisation to deliver a consistent brand strategy across all points of consumer contact, it’s equally important to have a precise and detailed understanding of how that policy is progressing. Brand Owners (from time to time) must step back and review how their brand is holding up. It is invariably an energising experience, and all those involved will find the process illuminating.Looking to learn the art of effective Customer Experiences? The ARA Retail Institute provides leading accredited training options including workshops and masterclasses in Revaluing the Total Customer Experience. Have a look at our class below:
ABOUT THE AUTHOR
ARA Retail Institute
ARA Retail Institute is Australia’s leading retail training provider for both accredited and non-accredited learning programs. The ARA Retail Institute is a Government Registered Training Organisation (RTO) making it fully qualified to offer retail education programs to ARA members and broader retail industry.