What is not Measured is Not Managed: Tracking the Success of Your Brand Investment

By Prophet

Many companies acknowledge the importance of brands as assets that hold leverageable value and can build and sustain competitive advantage. But in the current challenging economic environment, investments require careful consideration – and measurable proof of return. If brands are to be considered assets, they should be held to the same standards of performance and measurements as other assets, such as real estate or financial investments.

Yet few brands are measured against performance measures that gauge the success or failure of these investments. Fewer still can demonstrate the link between brand performance and business impact. Hotel companies dedicate significant financial and human resources to create, grow and enhance their brand equity without fully understanding the potential impact on their business’s bottom line. Brand metrics can help hotel executives not only measure the effectiveness of their brand investments, but also ultimately guide business decision-making.

In order to be successful, brand measurement systems must overcome a number of obstacles, including:

Focusing exclusively on "soft" metrics

One of the most common criticisms of brand strategy development and implementation is that it seeks to manage a set of intangible associations. And brand managers do themselves a disservice by focusing exclusively on brand measures such as awareness, which continue to reinforce these notions of intangibility. In order for brand managers to elevate brands and brand management to a strategic consideration with executives, brand managers must seek to link their efforts not only to more tangible business results, but also to the strategic objectives of the company.

Focusing on too many measures

A former employer of mine used to measure business unit performance at a qualitative level, with few tangible measures for employees to understand how they made an impact. Then, in one year, this company implemented an elaborate balanced scorecard along six dimensions, with each dimension consisting of at least three component measures. While the concrete nature of these metrics was a welcome change from the lack of guidance, this measurement initiative collapsed under the weight of its own management. Similarly, while brand metrics should be tangible, they should focus on a few key things that matter to the company and that can be maintained without creating a separate organization to support it.

Inconsistent metric tracking

One of the dangers of a complex measurement structure is the increased likelihood of abandonment. As measurements become difficult to maintain and sustain, they may be discontinued. Without a sense of consistency to gauge progress and impact, brand metrics become too easy to dismiss and discredit, inhibiting a manager’s ability to guide business decisions over the long term.


The most visible and widely cited brand metric today is brand valuation, in which a percentage of a company’s market value is attributed to its brand. Brand valuation can be a very effective tool to impress upon executives the financial value and subsequent importance of brands and brand management. But valuation is a benchmark, not an actionable metric. For example, the Hertz brand decreased in value from $3.6 billion to $3.4 billion from 2001 to 2002. What actions should Hertz take to reverse this 7% decline? What is the root cause and how should Hertz address relevant issues? If the valuation had increased, what actions are attributable to this increase (and how can they make sure to keep repeating these actions)? These questions remain unanswered when reviewing brand valuations.

Successful brand metrics enable companies to monitor as well as manage the health and stability of their business over time. A simple guide for brand metric development is represented by the acronym SMART. Brand metrics should be:

* Simple – The more complex the metric, the more time spent on measuring the brand than managing it

* Meaningful – There must be a direct link to brand-building efforts and business results

* Actionable – Business decisions and objectives must be aligned with brand metrics

* Repeatable – Consistent, repeatable application of a metric is necessary to demonstrate progress and drive business action

* Touchpoint-oriented – Deft orchestration of customer touchpoints is the key to effective and efficient brand delivery; metrics should capture success or failure at mission-critical touchpoints

Brand metrics can be divided into two categories: performance metrics and perception metrics. Performance metrics diagnose the brand’s impact on business performance and range from price premium to loyalty to lifetime value of a customer. Perception metrics diagnose how the brand is perceived by customers and key stakeholders and include brand relevance, awareness, and preference, among others.

So how should your hotel company identify, prioritize and track the right set of brand metrics? Below is a guide to developing the right brand metrics to steer effective business decisions.

1. Start at the top

To start, brand managers must align metrics to the strategic imperatives for the organization as a whole. Are the business’s goals focused on revenue gains, franchise growth, or geographic expansion? How will the CEO measure the success of achieving these business imperatives? The success of any brand strategy initiative lies in its ability to demonstrate impact on what keeps executives awake at night.

2. Link brand performance metrics to the business goals

If the businesses goal is to increase revenues, one key brand performance metric may be increased hotel customer retention and loyalty. By linking the business goals to the brand, brand managers can bring clarity and action to corporate priorities.

3. Identify brand perception metrics that influence brand performance

Determining which perception metrics are leading indicators of brand performance is an important step in this process. For example, if greater consistency in the brand experience is a key to customer retention and loyalty, then hotel employees’ understanding of how they represent the brand to customers will be an important element to monitor. Therefore, brand perception metrics such as internal brand understanding may be well suited to gauge progress against business and brand goals. While this is an example of an internally focused metric, the power of ensuring internal understanding and alignment should not be underestimated.

4. Establish ongoing process and responsibilities

Finally, in order to ensure the successful implementation and use of these brand metrics, hotel organizations must ensure that the proper processes and responsibilities are establish to track and maintain these metrics. First, look for existing measures that can be leveraged – not all metrics need to be developed from scratch. Second, assign explicit responsibility for the tracking and analytics of these metrics – without accountability, many brand efforts falter. Finally, find opportunities to include brand metrics into establish scorecards and measurement systems. By demonstrating the support/linkage to business objectives, brand investment and return can gain internal credibility and stature.

Brand investments will continue to draw scrutiny and skepticism in organizations – particularly these days. So it’s becoming increasingly important for organizations to establish brand measurement programs to tangibly demonstrate brand’s role in helping to build and sustain a competitive advantage in the marketplace. Choosing SMART brand metrics will give your company the tools it needs to successfully measure the effectiveness of brand investments and in turn brand’s overall impact on the business.

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