For all the hype over brand's importance as a key differentiator in an increasingly competitive marketplace, a new study from consulting firm Prophet suggests its influence has yet to reach outside the marketing department, often limiting its potential to drive business growth.
The 2002 Best Practices Study found that the idea of brand strategy is often spoken about but very seldom implemented. Of the 90 global corporations surveyed, only 53% have a long-term brand strategy in place, and only 40% of those are very satisfied with their strategy.
No best practices
The study's findings suggest that 'best practices' in branding - as evidenced by a strong brand that firmly correlates to strong financial performance - aren't being as widely practiced as you might think. Michael Dunn, chief executive for Prophet, commented, "It tells us that businesses need to do more to make the brand more of an organisation-wide driver of business decisions, if they expect to reap the full extent of its top and bottom line benefits."
That, of course, can't happen unless senior management leads the way and embraces the brand's role as a strategic imperative. And the study shows that this change of attitude has yet to occur, with 62% of respondents citing a lack of senior management support as the most pressing threat to their brand's long-term success. Of those, 68% cited a lack of funding, 45% cited a lack of understanding of what the brand stands for, and 32% cited insufficient long-term financial rewards for brand successes.
Unless you have tools in place for measuring the brand strategy's success, senior management will not be easily convinced of the link between brand strength and financial performance. Only 35% of respondents said they measure brand value and equity, despite the recent revelation (from Total Research's EquiTrend study) that businesses with the largest gains in brand equity saw an average ROI of 30%, whereas those with the largest losses in brand equity had an average ROI of -10%.
The benefit of commitment
Respondents whose senior management teams were ranked as having the strongest commitment to brand building attributed more of their brand strength to investments in human resources and training (52% against 22% among those whose senior management had little commitment to their brand).