How to measure nonprofit brand value

March 14, 2012      Kevin Schulman, Founder, DonorVoice and DVCanvass

If I show you two identical buses, except one is blue and the other is red, and ask you to choose your favorite I can assume that choice is driven by color preference.

Now imagine two direct mail pieces, identical in every way except the organization doing the soliciting.  Any preference (as opposed to no preference) must be a function of brand.  This is a true measure of brand value, one that drives choice and preference when all else is essentially equal.  Think about generic brand drugs – pharmacological equivalents to the name brand yet name brand only loses about 30% market share (in year one).  Why?  Power of the brand; not power of the medicine.

Awareness, familiarity, positive feelings toward the brand, a belief that that the brand is unique and that it means something to you (i.e. relevant) are all, in comparison,  soft measures and in some cases, distractions.

That said, the soft measures can be diagnostic.  For example, if we find that the brand does drive preference but it has low awareness and familiarity then more promotion and exposure are in order to drive revenue.  This has nothing to do with brand value or equity, merely exposure – meaning the value is not created by awareness, it is caused by the functional (i.e. product features and benefit) and emotional connections to the brand.

Let’s return to the identical direct mail piece example.  Let’s further assume that in addition to brand being different we also adjust the “ask” price at $20 and $30.  Now we have a 2×2 grid ,

Brand A, $20 ask Brand B, $20 ask
Brand A, 30$ ask Brand B, $30 ask

If I show you Brand A vs. B and both at $20 and you select B then I know you prefer B but I don’t know what price premium it provides.  Preference is a big upside benefit of brand but it can and should also deliver pricing power.  If I now show you A vs. B but B is $30 and A is $20 and you choose A I know it is less than $10 of price premium.  By contrast, if you chose B I know it is at least $10 of price premium.

Identifying a specific dollar amount with additional price points, an experimental design to cover all combinations and some interpolation allows us, in a very short and discrete study to assign a financial value to brand.  What is more, the 2 brand scenario can be expanded to include your entire competitive set.

As a second part of the same study we can determine what brand attributes, from a list of current or aspirational attributes really drive that preference.  One thing we know for sure, it won’t be all the brand attributes in your brand “bible” and those that do matter won’t be of equal importance in driving preference.

As a quick recap, measuring brand can be done to determine its financial value in the market relative to the competitive set, determine what attributes truly impact the brand and by extension, choice, and still include the diagnostic measures of awareness and differentiation to trouble shoot weaknesses.

Why do it any other way?