How to calculate the return on investment (ROI) for brand strategy

You can’t sum up the value of brand strategy in a dashboard. But you can learn the right way to value it, how much you should invest in it, and how to calculate its ROI in this article.

What is brand strategy?

How much should you invest in your brand strategy?

Where should you invest in your brand strategy?

How do you calculate the return on investment (ROI) of your brand strategy?

The benefits of investing in brand strategy

“If you don’t give the market the story to talk about, they’ll define your brand’s story for you.” - David Brier

Brand strategy is how you steer buyer, investors and employee perceptions of your business.

It’s much more than just a logo or a colour palette. It’s a powerful tool for positioning and differentiating your business.

Brand strategy is where you define your vision, harness intuitive knowledge of your business, and combine them with market insights to ensure the right people see the full value of your products and services. But it’s not a perfect science, and it’s not something you can rely on ChatGPT to whip up for you in a few clicks.

Creating a strong brand strategy still requires an element of human intuition and accepting unknown quantities.

And therein lies the issue for today’s organisations, many of which are fighting to stay afloat amidst faltering economies. How do you calculate your return on investment (ROI) for brand strategy and justify the budget when it’s hard to quantify? What is brand strategy? And how do you know how much to invest and where? That’s what we’ll dig into in this article.

What is brand strategy?

‘Brand’ and ‘strategy’ aren’t easy to define separately, let alone together. But we wouldn’t be a very good brand marketing agency if we didn’t try, so here goes:

“Branding is the emotional counterpart to marketing,” as our own book, The Difference Engine says. “Meaning, it’s the bit that happens in an eye-blink, that leaves a lasting feeling, that says something true and important and resonant.”

Your brand is what people feel when they think about your business. This is an important distinction because it’s much more than just your logo, and it’s not entirely under your control. You can refine your brand’s recipe with compelling messages, brilliant copywriting, a consistent tone of voice, a slick visual identity, and excellent customer experiences. But the crucial ingredient is the perspective of your buyers, investors, and employees.

Strategy, in its simplest form, is the process of identifying the right destination and the right way to get there. If tactics means doing things right, strategy means doing the right thing.

Brand strategy, then, is the process of evolving and sharpening your brand to change or enhance perceptions (feelings) about your business and improve its innate value. It can include specific goals and steps for success. But, it’s the journey that matters—it elevates your understanding so you can better align your business with what your target personas want.

The output of a rational brand strategy includes distinctive, well-orchestrated, holistic brand assets. These include:

  • Mission, vision and values
  • Positioning (in the context of customer needs and competitors)
  • Key messages
  • Brand archetype
  • Brand personality (including tone of voice)
  • Visual identity (including logo, colour palette, mood boards, graphic or illustrative styles, and iconography)

A powerful brand strategy knows which buyers, investors, and employees it’s trying to impress. So, before you dive into the intricacies of logos and language, you’ll need a clear idea of your ideal client profile (ICP) and buyer personas.

They’re crucial components in the Difference Engine, our marketing framework, honed over more than 20 years.

Why should you invest in your brand strategy?

According to the Gartner CMO Spend Survey, marketing budgets are down to 7 per cent of company revenue in 2024 from 9.1 per cent in 2023. They’re also yet to recover to pre-pandemic levels.

This is to say that we know every marketing function is feeling the squeeze to some extent. But that’s why brand strategy is more important than ever.

If you want your marketing to be more efficient at reaching and converting your target personas, it can’t be random. ‘Random acts of marketing’ are where you waste your budget. In fact, Boston Consulting Group (BCG) research found that strong B2B brands see a 74 percent higher brand marketing ROI and 46 percent higher market share than weaker B2B brands.

Marketing activity needs a rational and purposeful direction. It needs to share the right messages at the right time with the right people. You need to root it in brand strategy.

With that said, there are some specific triggers for investing in brand strategy. These include:

You’re launching a new brand

If you’re launching a new brand, you probably have your marketing budget earmarked for fast-growth-focused activity—advertising and PR. But this approach quickly leads to diminishing returns. The leads you generate won’t know who you are, so they also won’t know why they should stay loyal.

Investing more of your sales and marketing budget into brand strategy is an exercise in sustainable value creation. But it can also yield incredible financial results.

Think about Slack, which debuted its simple, distinct, and user-centric brand in 2013 and raised $120 million in funding to reach a valuation of $1.12 billion in 2014. There were already workplace communication tools (anyone remember HipChat or Yammer?) But none of their brands could hold a candle to Slack.

You’re evolving an existing brand

Your company, its target audience, and its market conditions have probably shifted since you created or refreshed your brand. That context is important because it changes who you need to hook with your brand and what their needs and drivers are.

As one example, consulting firm SBI found that 38% of B2B buyers are now including more stakeholders in the buying process, including the CEO. If that’s true of your buyers, you’ll need to evaluate how effective and relevant your brand seems through their eyes. And if you haven’t made significant changes to your brand strategy for years, you’ll need to invest more to get it up to scratch.

You’re launching a new product or entering a new market

It’s an exciting step for any business to launch a new product, or enter a new market. It feels like a mark of success to reach that stage—a validation of your vision. But it’s not a universal validation of your brand. Every new product or market brings with it a new set of buyers and sometimes a different cultural context if you’re entering a new region or country.

You’ll need to revisit your brand strategy in the context of these new buyers, including drivers and pain points. For example, a 2020 Gartner survey found that the most popular factor for making a software purchase decision in the UK was price and range of plans. In Germany, it was a free trial. And in France, it was the ease of use. These differences demonstrate how priorities vary among decision-makers by country, and the same can be true of decision-makers for different products.

Increasingly commoditised products or services

Is your market highly saturated and competitive (or going that way?) A strong, differentiated brand is one way to stand out, steal share from weaker brands, and challenge larger, broad-appeal competitors.

In BCG’s Commoditisation Navigator Framework, it identifies the ‘Premium player’ strategy for markets where differentiation is companies’ main source of advantage. Alongside innovation, patent protection, and market access, they note brand as a key part of this strategy for surviving commoditised markets.

Only one business can be the cheapest. The rest need brand strategy to compete.

Where should you invest in your brand strategy?

Knowing how much to invest in your brand strategy is like knowing the length of the proverbial piece of string. But, as a benchmark, the 2024 Gartner CMO Spend Survey revealed that businesses are spending an average of 8.1 percent of their marketing budget on brand strategy and activation this year. Your mileage may vary, especially when you take these next points into account.

Then there’s the question of where to invest to create or refresh your brand strategy:

Your internal marketing function has excellent knowledge of your business. They’ll even have some brand ideas waiting in the wings for their cue.

But, your brand strategy needs external validity, so working with an external partner is a good idea. You champion your business; they champion your future customers and bring insights from working with other clients.

Big-name branding agencies/consultancies are big names for a reason. They’ll have household names on their books and gloriously glossy portfolios of impressive brand strategy work. And you’re more likely to get what you pay for, including reams of rigorous brand documentation.

But their fees can be prohibitive, and more words don’t correlate with greater clarity (quite the opposite, in our copywriting experience).

Boutique B2B brand marketing agencies have smaller, expert teams that, because of their experience, can deliver a powerful, actionable brand strategy quickly. Also, you are more likely to get more experienced, senior people working on your project with a smaller, specialist firm.

But, they also have the resources to be true collaborators who rigorously research, review, and refine. And they have skin in the game when it comes to ROI. Your sense of value from their brand strategy work keeps them in business through case studies and word of mouth.

No prizes for which category we fall into. We’re unashamedly biased, but we do have the goods to back it up, like our brand strategy case study for Concord.

A screenshot of the Concord website which has forest green accents, a hero image that shows a building with solar panels on top, and a message that reads 'Fund your future with 179D'

How do you calculate your brand strategy's return on investment (ROI)?

“Brand strategy, in particular, can become a powerful bridge to enterprise strategy and the long-term health of the business.” - Gartner, 2024

Before you reach for the spreadsheets (or your Casio, if you kick it old school), the first tool you need to calculate brand strategy ROI is the right mindset.

Yes, there are ways to quantify brand strategy success—more on those below. But you need to frame it in the right way. Think capital expenditure (CapEx), not operational expenditure (OpEX), even if that’s not where it lives in your budget. If done well, the investment will send ripples throughout your business and make waves in your market (in a good way).

Once you’ve embraced the idea that brand strategy is a long game, you can turn your attention to business goals and key performance metrics. They form the foundations and context for your brand strategy, keeping it relevant and setting the stage for measuring ROI. They include:

  • Your financial goals (e.g. profit, growth, funding)
  • Your sales and marketing goals (e.g. customer acquisition, loyalty, and value)
  • Your and your competitors’ market performance (e.g. market share, stock value, share of voice)
  • Your digital performance (e.g. organic search traffic, backlinks, keywords)
  • Your current brand perception (e.g. PR coverage and customer and employee feedback)

If you’ve identified areas where you’re underperforming despite your team’s best efforts, these are good candidates to keep in focus for your brand strategy work and calculate its ROI. But there are multiple areas that any business can use to calculate the ROI of brand strategy. These include:

Brand awareness

Creating a brand that strikes the right note for your ICP will ensure you get their attention when they encounter you online or offline. Brand awareness metrics include:

  • Organic search volume for brand keywords
  • Direct traffic to your website
  • Social media mentions and engagement
  • Buyer surveys and focus groups

Customer satisfaction and loyalty

A distinct, relevant brand also helps make your existing customers proud to have you as a partner and encourage them to refer you. Customer satisfaction and loyalty metrics include:

  • Referrals
  • Customer lifetime value (CLV)
  • Upsell value
  • Net Promoter Scores (NPS)
  • Customer surveys and focus groups

Brand equity

B2B tech brands like NVIDIA and IBM wrote the rulebook on brand equity. A good brand enhances buyers’ perceptions of your products or services’ value, meaning they’re more likely to pay a premium. Brand equity metrics include:

  • Deal size
  • Customer acquisition cost (CAC)
  • Content views and engagement
  • Website views, conversions, and session duration
  • PR coverage (quality and quantity)

Employee engagement

With Glassdoor reporting that 92 percent of employees considering a move to another company if they had an excellent reputation, a strong brand can help minimise your recruitment and retention costs. Employee engagement metrics include:

  • Satisfaction surveys
  • Focus groups
  • Attrition rate
  • Productivity
  • Participation in training, development, and volunteering initiatives

Investor relations

According to 2023 research by the IPA and Brand Finance, 79 percent of investment analysts say that strength of brand/marketing is a very important factor in their appraisal and analysis. A strong brand strategy, then, is fundamental for business growth. Investor relations metrics include:

  • Meeting requests and attendance
  • Interest at events
  • Traffic and bounce rate for your website’s investor relations area
  • Analyst ratings
  • Pitch response time and feedback

Market share

Brand strategy isn’t just about showcasing the best version of your business. It’s also about optics—highlighting exactly where and how you excel. Clearly communicating your strengths will lead specific buyers to think there’s no better option for them. (We assume we don’t need to tell you the metric for this one…)

Set your expectations up for success

Brand strategy can yield short-term results. We’ve already mentioned the meteoric rise of Slack. There’s also Figma, which launched its rebrand in 2019 and tripled its revenue in a year. But brand strategy is still a long game for most companies, albeit one that always pays off.

When you’re seeking stability for your business, you want quick answers and quick wins. What you need is a solid platform for sustainable growth—a differentiated brand strategy that champions your achievements and puts you ahead of the competition in your ICP’s eyes.

When it comes to brand strategy, we don’t sell romantic, rose-tinted glasses. We craft precision lenses that help you and your buyers, investors, and employees see what matters. Ready for 20/20 vision of your brand’s future? Learn more about our brand strategy offering or contact us today.