What is ‘Brand Alpha’?
Let’s start by asking: What is ‘Alpha’? Any financial analyst will tell you. It is that elusive competitive advantage that all investors seek. Here’s an official definition, ‘Alpha (α) is an investing term that measures an investment strategy’s ability to outperform the market, often called its “edge.” It represents the excess or abnormal return of an investment compared to a benchmark index, adjusted for risk.” Alpha’s importance is demonstrated by the success of the world’s largest investor research community, Seeking Alpha, which publishes 10,000 crowd-sourced articles a month.
Alpha!
Investors, CEOs and CFOs seek it here, they seek it there…. Guided by generations of consultants from McKinsey, Bain and the like, they have focused on the Supply Chain, the bottom line – company operations. There’s little Alpha left to find there by now – the supply chain is largely played out, AI notwithstanding.
They have been looking in the wrong place. They should be focusing on the Demand Chain, the top line. It is the top line that generates the revenues and profits and is the driver of CEO’s #1 priority, which is growth.
The largest source of Alpha is hiding in plain sight. It is the power of brand to untap incremental revenues, profits and create financial advantage. There are few, if any companies, which have truly leveraged the power of their brand to drive value.
For decades, organizations have viewed brand as a marketing function. For CEOS, CFOs and Boards, the word ‘Brand’ means logos, package design, and advertising campaigns. It’s seen as an expensive luxury, an indulgence. Brand spend is the first budget item to be axed when times get tough.
One clear sign that this is wrong – companies that continue to spend on brand during a recession are positioned to gain significant market share as soon as things get better.
Untapping Brand Alpha
Our purpose is to help companies untap the power of their brands to obtain that elusive Brand Alpha. Our work identifies how to optimize brand to create the financial edge that enables a company to consistently outperform its competitors, the broader market, command premium pricing, and drive long-term growth. We treat brand not as a communications exercise, but a driver of business performance and a major source of shareholder value.
The Philosophy of Exceptional Growth
- Brand matters – it is one of the organization’s most valuable assets. Brand Alpha is founded on the fact that brands are among an organization’s most valuable assets. As the world’s economies shifted from manufacturing to services, the value of tangible assets (plant, property, equipment) was overtaken by that of intangible assets. The most valuable intangible asset is intellectual property (technologies, patents, R&D), followed by brand. Intangibles now account for approximately 90% of the market cap of the US stock market. The value of brand intangibles is estimated at over 30% of the total.
- A well-managed brand can deliver “supernormal’ profits For investors, Alpha represents superior performance or “supernormal” profits beyond expected market returns. Just as investors strive to achieve Alpha, we believe that marketers should try to achieve Brand Alpha: A well-managed brand should generate exceptional business performance beyond what would otherwise be expected. This philosophy underpins everything we do.
- Brand is about everything the company does It is so much more than marketing. Every point at which the company touches a customer or potential customer is a brand moment, where brand value can be created or destroyed. Brand is not just about positioning and design, but also about customer service, product features, distribution, and technology. If the product or service doesn’t fit with the brand, brand won’t deliver. Rather than operating solely within the marketing department, Brand Alpha therefore requires collaboration across executive leadership, R&D, HR, sales, finance, and operations. There must be consistency between what the organization promises and what it delivers.
- Branding should start from the future and work back Brand is too often stuck in the present. Traditional market research looks backwards. Marketers are focused on responding to immediate demands for an uplift in sales to meet this quarter’s targets. This is where spend is focused, fragmented and frittered. This isn’t what brand and marketing should be doing to achieve Brand Alpha. The job of brand is to represent the company’s future ambition. Brand should be positioned ahead of the company and help to drag it in the direction in which leadership wants it to go. Brand strategy should be based on an examination of where the categories in which the brand operates of might operate will be 5-10 years from now, who the customers will be, how they will think and act. The future should be the foundation for both brand and innovation strategy and investment. Brand should be an important driver of innovation.
- Brand decisions must be based on facts and figures We view branding not as a creative exercise but as a strategic business tool capable of delivering exceptional commercial value. While many agencies can produce excellent creative work, Brand Alpha differentiates Presciant. We combine high-quality design with rigorous research, strategic analysis, and financial metrics. This evidence-based approach ensures that branding decisions are informed by data rather than intuition alone.
The Brand Advantage
Presciant’s Brand Alpha philosophy delivers two significant advantages.
- Brand enables companies to make better, more informed brand strategy and design decisions because those decisions are grounded in research and commercial evidence. Your brand will be positioned in the way that resonates most with target customers. Your logo, design and creative will signal the proposition in the clearest and most compelling way. You can be confident that you are making the right decision, the one that will drive the most immediate and lasting business growth.
- Brand Alpha provides a compelling business case that helps secure support for brand strategy recommendations and approval of brand budget requests from senior executives and boards who may not have a marketing background. By demonstrating the financial rationale behind brand recommendations, marketers will find it easier to obtain internal approval and the budgets needed to implement their brand strategies effectively. The Brand Alpha approach bridges the gap between creativity and commercial performance, helping organizations optimize their brands as drivers of measurable business growth.
How Do You Untap Brand Alpha?
Take three critical steps:
1. Identify the opportunities which will create the most financial value
Map the present and future landscape. Apply primary and secondary research and/or AI brand measurement (best) and financial analysis to:
- Understand the drivers of customer decision-making
- Analyze emerging trends and evolving customer expectations
- Audit the company’s brand and competitor brands
- Quantify future market financial potential
2. Build the brand for the future
Define what the brand stands for and how it should be brought to life
- Purpose and positioning: Develop a brand purpose that communicates why the company exists and a positioning that translates this into benefits for customers, employees and other audiences
- Brand architecture: Optimize the brand portfolio to make it intuitive for customers and easy for them to buy
- Visual Identity: Design distinctive visual systems that signal the brand positioning across every touchpoint
- Naming: Create memorable and strategically aligned names that strengthen recognition and support portfolio growth
- Talent brand: Build an employer brand that attracts, engages, and retains talent while reinforcing the brand promise.
3. Execute, monitor and measure
- Creative: Turn the complexities of brands into their simplest, most impactful state for memorable brand storytelling.
- Customer Experience: Design consistent experiences that instill the brand into every customer interaction
- Marketing Budget & ROI: Allocate marketing investment to where it will generate the greatest returns.
- Brand Valuation & Measurement: Track the success of brand initiatives in driving revenue and profit growth, identify actions to be taken
Brand Alpha is a comprehensive framework for building, managing, and measuring brands as strategic business assets. Brand building is not a series of isolated creative projects, but an end-to-end business discipline that spans research, strategy, design, implementation, and performance measurement.
What Does Brand Alpha Deliver?
- Higher revenue growth
- Increased profitability
- Greater customer lifetime value
- Improved pricing power
- Stronger competitive differentiation
- Higher enterprise and shareholder value
- More effective allocation of marketing investment
The financial foundation that empowers marketing leaders to communicate with boards and investors uses the language of business rather than creative execution.
Brand Alpha transforms branding from a marketing expense to a strategic investment that generates exceptional financial returns. Companies that embrace Brand Alpha recognize their brands are not merely as symbols of identity but are catalysts for long-term value creation and enduring business success.