Developing a business case for brand change

By Mike Rocha


Competitors are gaining ground. The look and feel of products within your company’s portfolio needs a refresh. Employees are uninspired and disengaged. Your brand has outgrown (or underutilized) its current identity or positioning. Whether the realization came about as a result of formal analysis or your personal observations, you know your brand isn’t working hard enough for your business—and something’s got to change.

However, to make the kinds of changes that will drive your business forward, you also know that investment and support from the top of your organization will be required. As you prepare to make the business case for brand change, you will probably have questions to answer:

  • How should the brand be positioned?
  • What is the optimal brand architecture?
  • What kind of investment will be needed?
  • What value will this create for customers?
  • What impact will this have on customer behaviors and revenues?
  • What ROI can we expect?

Answering these questions requires a very diverse set of skills, from developing strategy to consumer research, analytics and financial modeling, determining the investment required and, crucially, the articulation of a compelling case. It requires a holistic view of a brand that can connect the dots between the way your brand functions, how its expression influences customer perceptions and behaviors and, ultimately, how the strength of your brand impacts financial performance.

By bringing together market, brand, competitor, and financial data, the brand valuation model provides a framework within which strategic options can be assessed and business case modeling conducted. In addition to brand value, business case modeling will include estimates of top and bottom line improvements, as well as expected changes in business value.

To fully harness the power of your brand to drive choice, win loyalty, and command a premium, specialist skills must be brought together and combined with a strategic overview. The goal, of course, is to secure future earnings and increase market share, but to arrive there, your brand must stay relevant. What will the future look like? Is the total experience of your brand one that is likely to create identification, differentiation, and value next quarter, next year, or five years from now? Knowing how your brand impacts financial results is critical to maximizing business value and staying competitive—and profitable—in the long-term.

How Interbrand approaches business case development

Many firms claim to be able to evaluate strategic branding options. However, very few have the range of skills needed to tie the impact of branding to financial results (and therefore business value). In order to do this, you must first establish the key revenue-drivers for the business. In telecom, for example, the biggest driver is typically churn, but ARPU (average revenue per user) and acquisition rates are also important. In financial services, the drivers may be customer numbers, average products per customer, and balance on account. In the automotive sector, the drivers are typically unit sales volumes and average selling price.

To fully appreciate how revenue is generated, it is critical to understand the relationship between brand perceptions and the revenue-driving customer behaviors we want to model. Using retail as an example, if we are able to create a more engaging in-store experience, we can expect that customers will spend more time shopping and enjoying the atmosphere. When encouraged to experience a retail environment at their leisure, customers tend to purchase more, and potentially higher-value, items. However, in order to gain any real advantage regarding revenue generation, it’s not enough to know that this sort of change is generally beneficial—you need to know why it’s beneficial and exactly how and where you might need to invest.

Before committing resources to brand changes, businesses want to know if the changes will be worth making and what the nature of those changes might be. To that end, a range of research and analytical techniques are available to help organizations better understand connections between customer perceptions and revenue-driving behaviors. At Interbrand, we deepen our understanding of these relationships by connecting existing data from across the business (such as data from market research, CRM, and financial systems) and also commissioning new research (which may involve testing new concepts or brand propositions).

Once research and testing have helped identify what kinds of changes might be necessary and how the brand might benefit from implementing them, a commitment to invest is the next step. In most cases, upfront investment is usually needed to get improvements underway. This might also be followed by ongoing operational costs to, for example, deliver certain hallmark experiences to support a revitalized brand proposition.

To help inform decision-making and make the case to the board for investment, we examine the variables in a financial model of the business, compare the potential upside with the cost to deliver, and present various strategic options for brand change and show how each approach is expected to impact business and brand value.

Case study: A premier international hotel and resort brand

Building an authentic, relevant and differentiated brand to drive enhanced business performance

This upmarket hotel brand had a smaller global footprint relative to key competitors like Hilton and Marriott, meaning that its brand needed to work harder to attract and retain customers worldwide.

After assessing the hotel chain’s objectives and considering the competition it was facing, we knew we needed to address a number of areas to strengthen the brand:

  • Identify an authentic, relevant and differentiated brand proposition
  • Identify the key touchpoints through which the new brand would have the most impact on customers
  • Create a business case to demonstrate the expected financial impact of the new proposition
  • Creatively execute the new proposition across key touchpoints

At the time, the brand was seen as a business traveler-focused chain. However, our analysis identified clear space in the market: a niche between high-end luxury hotels like Ritz-Carlton and Four Seasons and large business-focused chains like Hilton and Hyatt. We also felt that the brand had the potential to offer something different, a luxurious yet accessible alternative for those who would be travelling for business as well as pleasure.

We conducted extensive market research and found what really distinguished the target audience was their attitude to travel:

  • Worldly - They shared an interest in other cultures
  • Discovery - They had a willingness to try new things
  • Authentic - They sought authentic experiences
  • Optimistic - They were optimistic about travel and its pleasures

What these globe-trotters (or aspiring globe-trotters) ultimately had in common was a heightened level of sophistication—they wanted to be “in the know.” It was this key insight that inspired our brand proposition.

We wanted to ensure that the hotel chain became the go-to brand for people who wanted to be in the know, and the hospitality brand that went out of its way to deliver authentic and enriching experiences that make the traveler’s world feel bigger.

To figure out where the new brand proposition would have the biggest customer impact, we employed quantitative touchpoint analysis. While “value” turned out to be the most significant driver of overall customer advocacy, staff and in-room experience were also very influential factors.

Once we had a clear sense of what was driving customer preferences and perceptions, we then examined the relationship between customer advocacy and hotel performance. Through this analysis, we were able to demonstrate how our suggested brand proposition and strategy would not only improve customer experience, but also increase bottom-line profit (by tens of millions of dollars).

With a strong financial case as the foundation for our recommendations, we developed a strategy and creative execution for each of the most impactful touchpoints. Starting inside the organization, we created an internal engagement and communication program to build understanding and excitement around the new proposition. To deliver a higher level of personal attention, a locally-tailored concierge concept was developed both physically and online.

Building on the new proposition, we also created a philosophy around room design and experience that provided a real sense of location inside the room including, for example, local intelligence guides and TV welcome images. Today, this concept has been taken even further. For example, the hotel encourages travelers to explore the world through cuisine by offering a kitchen cookbook mobile app that features the hotel’s chefs in various regions sharing inspiring local recipes.

The impact? The year post-launch saw a 10 percent increase in brand consideration among the target audience, revenue per room was up 12 percent, and the hotel owner’s share price rose by 26 percent.

As this project illustrates, investing in your brand is not just a nice “extra.” Brand change can deliver significant returns, boosting both perception and your bottom line, but it has to be done right.

By consulting with experts who have the research and analytical capabilities to deliver maximum business impact plus the insight, talent, and diverse range of skills required to make the business case and then execute a winning creative strategy, organizations can leverage the power of their brands to reach new levels of profit and prestige.

Mike Rocha (mike.rocha@interbrand.com) is Global Director of Brand Valuation, Interbrand