The organizational culture that you establish may be your most valuable asset and the key to your growth. Although culture and brand are both thought of as hard to define, measure, and manage, it’s important to understand the impact of brand equity on profit margin, customer acquisition, and customer retention. Being able to measure the value of your business culture will ultimately drive authenticity within your organization.
Breaking down brand and culture
Your brand and culture are impacting your ability to grow and retain. But how do we define them?
Brand: A company’s brand is the collective impact or lasting impression of a customer’s experience with a company, its products, and services.
Culture: The tacit social order of an organization: It shapes attitudes and behaviors in wide-ranging and long-lasting ways. Cultural norms define what is encouraged, discouraged, accepted, or rejected within a group. When properly aligned with personal values and needs, culture can unleash energy toward a shared purpose and foster an organization’s capacity to thrive.
Both brand and culture help to distinguish who you are as a company. The culture of your company should be defined in order to translate it into your brand, serving as your differentiator.
How do you measure Brand and Culture?
Measuring brand and culture can be tricky at first since these two things live within your employees and customers. Marketing science has studied the impact of brand equity on profit margin, customer acquisition, and customer retention for decades. Brand equity is one of the largest components of ‘goodwill’ in company valuation but has a real day-to-day impact on your profit margin. You can find measurables in:
- Customer Lifetime Value (CLV): Customer retention rates, acquisition rates, profit margins, and net present value of long-term profit contribution of the customer.1
- Net Promoter Score (NPS): Referral rates and word of mouth, the likelihood of repurchase
- Valuation: In public companies, brand equity is a driver of stock price
The onset of digital transformation has intensified the need for building both a strong culture and brand. With more hybrid work environments there is less time together to understand what exactly your employees and customers need. Some strategies you can set in place to measure your culture and brand within your company can include:
- Focus groups
- Performance reviews
- Customer lifetime value
- Customer rating
Looking at the numbers
- Companies with poorly developed brands pay 10% higher salaries.
- Companies with a strong employer brand have 43% lower hiring costs.
- Organizations that prioritize a positive culture outperformed the S&P 500 by 122%.
- In B2B public companies, brand equity is a measurable driver of stock price—from .5% for underdeveloped brands to 20% in best-managed brands.
- Consistency of branding across all platforms can increase revenue by up to 23%.
- B2B companies whose brand includes values, not just “table stakes” have 5x NPS than those that don’t.
Your Brand is more than just a logo
More than a pretty picture, the true personality, motivation, and value of your organization are your brand. Sophisticated customers demand authenticity, specificity, transparency, and a seamless experience. What your employees and customers value set the tone for your brand positioning, purpose, promise, personality, as well as your look and feel.
Learn more on how brand and culture go hand-in-hand to create an authentic competitive advantage in a changing market.