For years, advocates of strong brands have argued that they make businesses more valuable. Strong brands build loyalty, reduce customer churn, and most importantly, give businesses pricing flexibility. In theory, brand equity should equal pricing power.

The problem is that most marketers cannot demonstrate this link when challenged. Only two in five marketers can measure the connection between brand and price elasticity, the metric that captures how sensitive demand is to price changes. This leaves many still relying on belief rather than evidence. But belief is no longer enough in today’s boardrooms.

The Blind Spot in Marketing Measurement

Marketing teams track a flood of metrics: awareness, engagement, impressions, and reach. Dashboards are full of colourful data points, but many of these fail to connect directly to pricing power or profitability.

The gap is clear. Marketers can prove whether people know the brand, but rarely whether people are willing to pay more for it. This disconnect between brand measurement and financial outcomes leaves marketers vulnerable, especially when CFOs and CEOs demand proof of return on investment.

Closing this gap is critical if marketing wants a seat at the table in pricing strategy.

Why Pricing Power Is the Ultimate Test of Brand

If a brand is really great, it should be able to do three things:

For the same goods, charge more than your competitors.

You won’t lose people if you keep the price the same during inflation or downturns.

Over time, even if costs go up, profits grow.

This is called “pricing power” by economics, and it is one of the best ways to tell if a business will make money in the long run. It’s known by investors. Boards are aware of this. CEOs who are good at their jobs know this.

But a lot of salespeople can’t show it. Instead, they have to defend with vague measures that don’t make sense in financial conversations. If you don’t have proof, brand value is just an idea and not a plan.

The Missing Link: Brand and Price Elasticity

Price elasticity measures how demand responds to changes in price. A product is highly elastic if a price increase leads to a sharp drop in demand. Inelastic products retain demand even when prices rise.

A strong brand shifts elasticity. It makes customers less price-sensitive by reframing value in ways that justify a premium. That is why people willingly pay more for sneakers that signal identity or for smartphones that communicate status, despite cheaper alternatives.

The challenge for marketers is to prove with data that brand equity truly influences elasticity.

 How Marketers Can Quantify the Link

To close the gap, we need both new tools and a new way of thinking. To show the link, marketing leaders can do any of these four things:

1.     Studies on brand value and willingness to pay

Don’t stop at polls of knowledge and choice. Find out how much more people are willing to pay for your brand than for others in the same category. This doesn’t just show loyalty; it also gives a real-world measure of value.

2.     Making models of price elasticity

Figure out how demand changes as price changes by working with teams of data scientists. You can compare the flexibility between groups or between branded and non-branded goods. You have price power of your brand’s flexibility is low.

3.     A look at LTV/CAC based on brand strength

Lifetime value-to-acquisition cost ratios should be better for brands that are stronger. Customers who are drawn in by a strong brand stay longer, buy more, and cost less to keep. This makes a straight link between the business and making money.

4.     Connect tracking your brand to financial KPIs

Do not treat brand tracking like a different screen anymore. Combine measurements of brand health with information about margins, customer revenue, and price stability. This shows business leaders how changes in how people think about a brand have real effects on its profits.

A Cultural Shift in Marketing

It’s not just about facts; it’s also about how you think. Marketers need to change from telling stories to making things valuable. That means learning how to talk about money and business in a new way.

Stop looking for meaningless measures. Being aware without being ready to pay is just noise.

Talk in terms of making money. When you talk about brand equity, don’t just talk about mindshare; talk about how it affects your bottom line.

Work together on finances. When it comes to the CFO, marketers who can back up their ideas are the most trustworthy.

These changes will make marketers who protect their budgets different from marketers who drive strategy.

The Risk of Staying in the Dark

If marketing can’t show that brand power is linked to price power, there are two risks:

Plans will be cut first. When money is tight, spending on brands is seen as a luxury unless it’s tied to making money.

There will be no promotion, but decisions will be made. Finance and sales will decide on pricing, profit strategy, and growth plans, leaving marketing with less to do.

Both of these risks are fundamental. Marketing needs to be able to show that brands directly lead to profitable growth. Measuring how brands affect price flexibility is the best way to do that.

The Future: From Belief to Proof

People used to promote brands as a matter of religion, but those days are over. There is a lot of pressure on every field to show how their work affects other fields.

It’s a clear chance for marketers:

Show that brand makes people less sensitive to price.

Show that the ability to set prices comes from business as well as money.

Make the company the thing that drives successful growth.

A brand that can’t be proven is just a guess. A brand with real-world price power is a plan.

Marketing’s New Mandate

At the present time, only 50% of marketers are able to measure the relationship between brand and price elasticity. A credibility issue, not only a gap, exists there.

During this period of lucrative expansion, the most important thing that marketing can provide is not yet another campaign or click. It’s proof that the brand enables the company to charge higher prices while maintaining profit margins and achieving sustainable growth.

The most important marketing statistic is pricing power. Our brands and companies will benefit from measuring it as soon as possible.

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