Interim Executive Question: Can the Costs of Poor Brand Performance be Measured?

Question:  Can the costs of poor brand performance be measured?

The cost of poor brand performance is real and it can be measured.  The elements of cost are tangible and often already measured by companies, including: rework, error correction, concessions, lost opportunities, and customer attrition.   Each one of these elements increases your cost of service, selling, support, and overhead as remedies are implemented to correct them.  These costs can have an exponential impact across the transmission systems:  that is, each element or system that fails, or any inconsistency between them or against the brand promise tends to compound the noise in the communication and impact the perception of the customer.  Why is there such a compounding effect?  Remember that for business to business customers, the sum of all of their experiences and all the communications with your entire firm over time serve to create their perception of your brand.  When one element disappoints the customer, it is automatically compounded by another element – even though they may seem totally unconnected from inside your company.  Left unchecked, the customer’s disappointment will grow and negative perceptions will expand beyond simply the issues at hand to become a general perception of your whole business.

While the cost of negative brand efficiency may be difficult to measure precisely, the direct impact of poor performance and quality on each of the communications systems can be measured.  Many businesses have sophisticated processes, software and even six sigma quality improvement programs designed to measure and improve that performance and increase profitability.  These initiatives do not often measure systems across the enterprise and rarely, if ever, do they measure the effectiveness and consistency of communication and performance of all of these systems with the intended brand strategy of the business.  Managing each one of those issues in isolation and not in a holistic manner aligned with the brand strategy will result in an exponential drain on energy and resources required to deliver sustained profitable growth.

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