Booz Allen Hamilton and the brand consulting firm Wolff Olins carried out research among marketing executives across Europe. It shows that over 90 percent of companies believe their brand is a key element of their success—twice as many as five years ago. Yet less than 20 percent put the management of their brand at the heart of their business systems and capabilities. This appears to be significant in explaining superior brand performance.
The study identified three categories of organizations:
…recognize the importance of brands and sound management of brands for their business success. They have established a common understanding of what the company stands for, and hence have assigned clear brand ownership at top management level. Brand-guided companies occur across all industries.
Emerging brand companies
…have not yet fully recognized the importance of brands for their business success but expect brands to become increasingly important over the next five years. They are working on establishing a common understanding of their brand within their company, but have not yet established clear brand ownership.
…do not consider brands to be an important factor to their business success today and do not believe they will be important in the next five years. They do not intend to develop a common understanding of their brands within the company and have no interest in establishing clear brand ownership in their organizations.
Brand-guided companies have clearly-defined brand values that are understood throughout the entire organization. They establish well-defined ownership for management of the brand at top management level. This enables the brand to provide the cohesive force that guides key activities—such as product development, customer service, sales, and operations—and supports the strategic management process.
On average, the research shows that brand-guided companies have profitability margins nearly twice the industry standard.
The study also identified 10 key attributes of brand-guided organizations.
- The company recognizes that the brand is a key asset in delivering its strategic targets at a level that is higher than the industry standard
- The company doesn’t consider the brand as merely a communications issue—brand is recognized as the key platform to link the company strategy with customers and employees
- Brand management processes are integrated seamlessly into the company’s processes—i.e., “branding” is not a separate activity
- Success is generated by corporate confidence—the brand delivers that success by providing a catalyst for the company’s products, services and employees
- Senior management is accountable for the brand’s continued health—brand responsibility resides at C-level
- All employees share a belief in the brand as well as a common understanding of it, the power of the brand acts as an incentive to employees, employees’ activities are aligned with the brand values and contribute to building and strengthening the brand, and employees are measured and rewarded by the success of these brand-guided activities
- Marketing department is able to talk in terms of expected return on their investments—marketers can leverage customer insights to make the most effective marketing decisions, they can also analyze what they know about customers to contribute effectively to strategy in the future, and marketing activities are always closely aligned with the core brand values
- The company has sufficient IT capability in place to capture data on customers, segment them effectively, respond to their needs, and catalyze marketing techniques to deliver high ROI
- The company assesses key performance indicators, such as “share of wallet,” on a regular basis—as a result of these assessments, you take appropriate management action
- The company identifies brand equity (the financial value of your brand)— understanding the brand’s value drivers and the levers required to influence these drivers