Branding is not really quantifiable, but it is an important aspect for corporate giants. Being a coveted asset, the brand is at constant risk of attack. As the de facto risk officer of the company, the CFO is tasked with protecting this valuable company asset. Here we take a look at why and how a CFO should consider adding brand stewardship to their many roles.
Branding may not be quantifiable from an accounting point of view. But it is the single most important aspect of any corporate giant. The brand value its name holds can drive customer sales and profits through the roof while also playing an important role in keeping the investors happy. Being such a coveted asset, the brand is at the risk of constant attack from competitors and naysayers which can cause serious repercussions. As the de facto risk officer of the company, the CFO is by default the leader who is tasked with protecting this valuable company asset.
In this article, we will take a look at why and how a CFO should consider adding brand stewardship to their many roles. We will also talk about how this asset can be protected.
In today’s digital age and interconnectedness, brand reputations can undergo serious damage overnight. The trick to eliminating brand risk is through brand resilience as a great brand is a resilient brand. A company should be able to identify foreseeable threats and prepare for any imminent attacks.
- Calculate Brand Risks
Begin by calculating what it is that drives their brand value, be it price premiums, customer loyalty, PR or repeat purchase rates. Take into account scathing online reviews of a product or a disgruntled ex-employee leaving negative reviews of the workplace.
Identify the truly critical ones and narrow down to the ones that could affect the customer base and the trust they have placed on the company.
- Prevent Such Attacks
Once this is ascertained, take necessary precautions so that no such attacks occur. This can only be achieved if the finance function works in conjunction with the marketing function and vice versa. What this does is that it highlights risks to the stakeholders and helps identify potential brand threats.
Build an awareness of the threat and teach employees to assume an active role in preempting, detecting, and reducing the possibility of its occurrence. Develop a targeted training program to help employees identify brand risks along with the marketing department. Pay attention to not just what is thrown at the brand, but also any chatter related to the brand across multiple media sources and weed out what is important and what is not.
- Chart Out A Strategy
Now that the brand threats have been identified, the next step is to protect the company in the event of an adverse brand situation through a pre-charted calculated response. Depending on the level and the source of risk, the business should have different strategies planned out for each type of a situation. Narrow down the media channels that can help the company in case of a brand attack or an alternative operational plan in case the product packaging or a new tagline causes a negative customer experience.
A CFO can be instrumental in keeping a close watch on key performance indicators (KPIs) surrounding the brand. Measure, analyse, and report performance to understand whether the efforts to manage brand risks are helping. This can also be helpful in presenting these reports to the board in case of a brand attack.
Keep the brand allies, loyalists and brand ambassadors close so that in case of a damaging situation, these influencers can help sway the popular opinion in the brand’s favour.
In the event of a brand attack, as tempted as people may be, putting in the past and moving on is a wrong thing to do. Instead, once an attacks actually occurs, determine the cause, extract lessons and then use the learning to adapt and make changes.
A brand is ever-evolving and needs careful maintenance and nurturing to truly reach its potential. A strong brand resilience should be a part of the company’s long-term goal and be given its due importance. Rather than spending crores or millions on crisis management, a preventive strategy with effective resource allocation towards planning, execution and maintenance could go a long way in cutting down future brand associated risks while championing the brand and the company growth on the whole.