When Fortune 50 clients like Hewlett-Packard and Verizon consider engaging BrandActive, they often have one critical question on their mind – how much is their rebrand going to cost? It doesn’t matter if it’s a merger, acquisition, or rebranding of an existing enterprise, executives are eager to know what the price tag will be to move out the old and bring in the new.
The importance of benchmarking when it comes to rebranding costs
Answering this question is not as simple as amassing a lot of numbers. Organizations must consider which rebranding approach will best align with their new brand strategy and business realities, as well as how to best allocate resources, focusing on value delivered versus cost. It should involve considering “good, better, best” rebranding scenarios and weighing these against company branding goals and fiscal realities.
At BrandActive, we conduct this analysis as part of our Scope and Assess phase, following a systematic process to estimate costs and identify the impact of various approaches across a range of key variables. We begin by utilizing information provided to us by our clients. Typically, the information we receive is an approximation of the cost of replacing the old brand across all branded assets – from signs, uniforms, and badges to letterhead, IT, and legal.
But this is only the beginning of the process as we need to be certain that the cost estimates are correct and that the data is complete and accurate. Equally important is to test that the underlying assumptions relating to the information collected are appropriate for the given circumstances and properly account for the timing of the conversion, quality and desired brand impact.
Benchmarks allow you to manage your internal audience’s aspirations with the help of credible quantitative analysis.
To make this determination, we compare the client data to our benchmarks – BrandActive’s proprietary data intelligence that relates to every aspect of a rebranding implementation. These benchmarks inform our analysis and cost estimates, and are based on our detailed, empirical database of “good, better, best” scenarios, by industry, that have been amassed over 19 years of planning and managing rebranding implementation for many of the world’s most valuable brands. Clients have the benefit of informing their implementation financial planning and strategy development with information gathered from dozens of previous rebranding projects just like theirs.
The goal is to enable fiscally responsible branding decisions based on a clear understanding of the price tag, timing, quality, and other implications for different approaches. For example, what’s the cost of a “big-bang” changeover, i.e. an implementation in the shortest time possible? How does that compare to phasing in change over time, an implementation in which inventories of letterhead, uniforms and other branded assets are depleted?
The immediate benefit of using benchmarks is that clients can quickly rein in unrealistic aspirations by being able to rely on credible quantitative analysis to manage expectations across all key stakeholders. This also helps gain support for the financial plan and strategy at the senior executive and board level.
When BrandActive was engaged by Hewlett-Packard to assist with the financial planning relating to the split of HP into 2 entities, the CFO of HP marketing commented that “Without BrandActive’s substantial insights in the planning phase, we would not have considered all of the nuances related to developing an entire new brand. BrandActive’s financial analytics group gave me confidence in the numbers that were presented and helped credentialize our plan with senior leaders.”
Our benchmark databases provide value in other ways as well. Clients inevitably want to know how their plans compare to market standards. Are they getting the impact desired for the investment? Cost isn’t everything but benchmarks can signal a disconnect between strategy and spending. If for example, it is typical for companies in your industry to invest $1 per square foot for signage and your company has spent 65 cents, the brand impact you achieve will probably fall short of the impact achieved by your competitors. These sorts of comparisons can be invaluable in persuading senior executives and directors to adopt a more robust rebranding approach.
When it comes to committing to that final budget number, there is no substitute for a rigorous cost-estimation process, where every line-item is examined and analyzed in detail. Our clients benefit from our use of benchmarks to guide and vet this analysis, ensuring that the appropriate rebranding implementation scenarios are compared, allowing for the achievement of both business and branding objectives.
