Most large companies, beholden to shareholders, manage by quarter with the goal of increasing share prices. While for publicly traded companies, this is a business reality, it tends to grossly mask the importance of long-term brand equity in determining stock market success. According to a white paper written by the Phelps Group, entitled Linking Brand Equity to Stock Equity, “every 1 percent increase in brand equity is associated with a roughly 1 percent increase in stock return.” This is “consistent with the fact that investors realize that a brand is an asset that can lead to higher future-term earnings.” Also they found that stock market return was positively related to ROI and there was a strong positive relationship between brand equity and stock return.

Short-term stock spikes, achieved through such things as deep discounts and irrelevant brand extensions, are just that – short term. They ultimately cause companies to fall into a game of catch up that can turn into a losing situation. But, managing your brand on a daily basis, for the long-term, will have the effect of increased brand equity resulting in steady increases in share prices and increased shareholder confidence over the long-term. Who doesn’t want that? Now if we could just convince the shareholders not to judge a company by its quarterly results alone…

- Jen Travis

Mattel, manufacturer of some of the world’s most beloved toys, was named to the “100 Best Corporate Citizens 2007” and yet, two million Mattel toys have been recalled due to a possible lead-paint hazard in a Chinese factory. On the company’s website, “Global Manufacturing Principles” are depicted as the top tier of social responsibility. This makes me weary of other brands that are claiming to be socially responsible. Has social responsibility become just another form of greenwashing? How can we really trust a brand to be socially responsible?

-Hiley Spaet

Brand Autopsy wrote a post today on Vince Poscente’s newest book, The Age of Speed which uses a story about tightrope walking to illustrate the point of focusing on your destination in a fast paced business environment. “Once the target was clear and we stayed focused on it, the path and the process were simple – we were balanced and fast.”

I think this is a great way to illustrate how your brand promise and focus can provide a clear path to your destination. Without it, businesses find themselves staring at their feet, constantly worried about falling rather than ready to take risks to get where they need to go. Does your company look up or look down when walking the tightrope of fast paced business? Where do you fall down (innovation, company culture, product development, customer relationships…)?

- Jen Travis

Lynn Parker will be speaking at the Advanced Learning Institute’s Internal Branding Conference. The conference will cover topics on communicating to your employees how to build your brand, change their behavior and ultimately impact your organization’s bottom line.

To find out more, please visit the Advanced Learning Institute’s website.