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By Dick Maggiore and Mark Vandegrift

Bettering ROI and Brand Perceptions

Improve Brand Perceptions. Improve ROI.

Many marketers misunderstand marketing. They think marketing is a battle of products, not brand perceptions. Let the better product win is the adage.

More than four decades of modern advertising history contradict this belief. Coca-Cola is the worst tasting cola and still No. 1. People taste images, not products.

Marketing is a battle of brand perceptions not products. In this battle, quality doesn't win. Perceived quality wins. This is why the primary function of an organization is to "position" the brand.

Positioning strategy is all about improving your brand perceptions. After many years promoting this truth, there are still many skeptics. Fact-minded CEOs and CFOs want hard data, not anecdotal storytelling.

They want the missing link that connects brand-building (perception building) with ROI.

Well, for the empirically minded, we have some new news. A PIMS (Profit Impact of Market Strategy) database study conducted by the Strategic Planning Institute (SPI) shows the remarkable affect the quality of a company's brand perceptions has on return.

PIMS data includes information on markets, competitors, quality, structure, environment and financial performance. The original concepts upon which PIMS is based were developed at General Electric (the world's most successful conglomerate) from the mid-1960s and was established as a developmental project at the Harvard Business School (the world's leading business college) up until 1974.

In 1975 the Strategic Planning Institute became a separate non-profit. Credentials out of the way, a recent PIMS study showed that companies with a high "perceived" product or service quality have an average return on investment of 29%,  while companies with a low "perceived" product or service quality have an average ROI of 13%.

In other words, companies with high perceived brand perceptions realized 123% more return than those with low perceived brand perceptions.

The conclusion is inescapable. Higher ROI begins with managing the value of your brand perceptions. And, the process of managing brand perceptions starts with positioning:  finding your company's unique difference and expressing this idea in a surprising, compelling way.

If your return is 13% or less, ask yourself, "Do we have a quality problem, or a perceived quality problem."

Your solution may be found not in the factory or store, but in the mind of the prospect. Improving the worth of your brand perceptions may be the solution you're after.

Lorraine Kessler is Innis Maggiore's Principal Client Services & Positioning Strategist.