Strong brands enjoy more efficient business models than weak ones.
Updated: Aug 28, 2020
“Most balance sheets do not track brand value because it is an “intangible” asset. This is a pragmatic accounting practice. That is fine but it can be a trap because “intangible” implies “unimportant” to people who are looking to cut costs. “Brands Have Two Jobs” describes a path forward that aligns the objectives of financial and marketing management around the goal of profitable growth with appropriate risk management.”
(from the white paper, Brands Have Two Jobs, McLaughlin Strategy)
In the digital era, brands tend to become ever more efficient, revenue-generating machines right up until the moment when their market share falls out of bed. Even the savviest marketers in the world, like Gillette and Oscar Mayer, have had to write-down their brands’ value due to its unexpected and dramatic fall.
Here in the Carolinas, we are fortunate to have many successful small to midsize businesses. They turn to KaplanCFO for a variety of specific reasons, many of which share a few common themes:
The company wants to make substantial infrastructure investments because it is ready for dramatic growth.
The founders or leaders of the company are positioning the business to be sold.
A fast-growing business has reached a plateau and seeks advice on how to transition to the next level.
Situations like these call for strong financial leadership and they also are critical moments to make sure that the brand is healthy, vital and correctly positioned to drive the outcomes that the CEO and CFO are pursuing.
Strong brands grow profitably and safely when financial best practices and marketing best practices are in alignment. That is easier said than done but the effort is rewarding. “Brands Have Two Jobs” provides a valuable prescription for organizing the enterprise around brand investments that are right-sized for the opportunities at hand.
Mark McLaughlin is President and CEO of McLaughlin Strategy. He has two decades experience in marketing, media and advertising strategies. Working with dozens of Fortune 500 companies in every major field from politics to packaged goods, Mark is recognized for treating advertising as an investment in brand equity and sales returns.
He can be reached at: [email protected]m