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Last updated on: February 23, 2023
All the revenue your business generates is the reward for the time, money, and effort you invest in it. That’s why it is essential to protect your brand from counterfeiting, piracy, and impersonations to maintain the integrity of your business and maximize its profits.
As an expert, you probably have designed some brand protection strategies against intellectual property infringements. But how do you measure the return on investment (ROI) of your brand protection strategy?
In this article, we will discuss:
Let’s dive in.
Brand protection strategies refer to the measures taken by a brand to protect its intellectual properties assets like trademark, patent, copyright, and so on from imitation, scam, piracy, infringement, phishing, cybersquatting, spoofing, fake ads, fake comments, identity theft, and trademark stealing.
A well-crafted brand protection plan goes beyond designing a great logo and website to promote your business – it involves more in-depth tactics that help establish your company’s reputation, as well as protect its identity from possible copycats or unfair competitors.
Such strategies include strict monitoring of the marketplace such as Alibaba, Amazon, Mercado Libre, eBay, DHGate, and Shopify, as well as the social media platforms to identify potential violations or misuse of the brand.
It can also be by actively engaging with consumers online, registering any logos or trademarks associated with the brand, implementing legal protections such as patents and copyrights, or leveraging the professionalism of a brand protection company.
Brand protection ROI is the return on investment related to the strategies used to protect a company or organization’s brand assets. Brand protection strategies not only protect your brand from potential events, such as cyber-attacks or reputation damage but can also lead to increased profits.
Calculating the financial benefit associated with this type of protection is done through an ROI assessment – a calculation expressed numerically or as a percentage. This helps organizations understand the impact of their brand protection efforts on their net earnings or bottom line.
Brand protection ROI provides an accurate way for organizations to determine the value of their investments in protecting and strengthening their brands.
Measuring the revenue that a business has lost due to counterfeiting and impersonation can be difficult but with the right approach, businesses can start to get an understanding of their financial loss. Six ways to measure the losses due to such criminal activities are:
When customer complaints are reviewed, businesses can identify any poor quality or inferior copies of their products that have been sold in the market. This gives them an understanding of how bad actors are making a profit at their expense while still selling counterfeit and spoiling their reputations.
Proactively monitoring online activity on social media or marketplaces will ensure that businesses can identify any mentions of their products or brands that have been copied by counterfeiters. This helps them gauge the extent to which their products are being counterfeited and the level of impact this has on their revenue. Revenue loss is more likely to occur when there are more complaints and negative feedback.
Another way of measuring revenue lost due to counterfeiting and impersonation is by analyzing the company’s sales data over time, this can help identify any discrepancies or changes in trends that may be related to counterfeiting activities. This can help businesses understand the financial impact of counterfeiters on their sales and revenue.
Brand protection companies use sophisticated tools and technologies to identify any fake or imitation products online. Businesses can employ their services to automatically identify the extent of such activities as well as recommend strategies for reducing counterfeiting activities.
By leveraging these methods, companies can obtain an accurate assessment of their losses as well as figure out how best to prevent them in the future.
There are several ways to measure your brand protection ROI, but in order to understand how you can calculate it on your own, here we are going to explain how Red Points measures the ROI of their clients based on the economic value of all the enforcements made.
If we take into consideration the difference between the fake product and your original asset, we are going to obtain what we called ‘lost sale rate’. If your product is cheaper than the fake, this difference will be above 100%, which means that consumers are more likely to buy your product than the fake. If the fake product has the same price or is very similar to yours, the lost sale rate will be close to 100%, and consumers will get confused and might buy the counterfeit by mistake. If the fake product is cheaper than yours (which is often the case), the lost sale rate will be lower than 100% and consumers will likely buy the counterfeit.
We consider Minimum Return of Revenue as the lost sale rate of all your enforcements. The lowest this percentage is, (conservatively) the higher your return of revenue will be.
Also called the Potential Return on Revenue, it represents the most realistic economic value that is getting back to you. It considers a ‘weighted’ lost sale rate that considers certain indicators such as price, stock, and amount of incidents per asset.
At Red Points, we consider a default15% of lost sale rate, which is an estimated percentage based on brand protection studies. This rate doesn’t consider the specific situation of your brand but it gives you an approximate return of revenue that goes with the general market.
Let’s say you have successfully enforced $178,000 worth of counterfeits. The inferred legitimate price and fake price are $35 and $16 respectively, this means the margin (lost sale margin) between the prices is $19.
This means that the original price is twice as expensive as the fake price. From the lost sale margin, we can calculate the lost sale rate. From this example, the lost sale rate is 45,71%, which translates to $81.364 of Return of Revenue.
A good brand protection solution can help companies measure and improve their ROI by providing essential features such as:
The more successful, unique and valuable your products are, the more likely it is that bad actors will target your brand. Protecting your brand in-house may work at first but eventually, if the number of infringements continues to increase, it will become too much to handle on your own. A Brand Protection solution that covers multiple channels and platforms and is able to manage high volumes of infringements will help you protect your brand from potential revenue streams and reputational damages.
Counterfeiters have the upper hand: they can sell their products before you know about them. Early detection of counterfeiting and other infringements enables brands to act swiftly and minimize the damage, especially if the solution you choose gives you visibility of those infringements that are more impactful on your consumers and, ultimately, to your revenue.
Detecting an infringement is critical, but enforcing the incident is the ultimate goal of a Brand Protection solution. Only when the infringement is taken down is when your consumers are safe and your reputation and sales are not compromised. A good Brand Protection solution should give you an enforcement success rate that compensates the investment. A good way to know this is calculating the time and money you would spend enforcing the same amount of infringements with your in-house team.
Using a Brand Protection software to track and take down infringements not only minimizes legal costs associated with civil or commercial litigation but helps bring about quicker outcomes for true IP owners.
An individually tailored strategy and reporting are essential for keeping ahead of the ever-changing landscape of counterfeiting and brand infringement. The ability to analyze trends with real-time data, coupled with hyper-personalized incident handling and customized enforcement tactics, allows an effective Brand Protection solution to greatly improve your ROI.
With a comprehensive system, you can be confident that each incident is handled with the most suitable course of action in mind for maximum efficiency – saving you time and money.
An efficient Brand Protection program will help get it done faster and more effectively, allowing you to focus on other areas of your business operations knowing your brand’s value is being accurately protected.
The advantages you can derive from making use of Brand Protection Software to improve your ROI are innumerable. The benefits can be broadly classified into 2 which are:
Now, let us discuss them one after the other.
This benefit refers to the non-monetary advantages derived from brand protection solutions. Most of the time, these advantages mean more to the executives of a brand. These can include:
Protecting the integrity of a brand is one of the key reasons businesses opt for a brand protection solution. Not only does it ensure that the company’s name and reputation are safe, but it also allows for growth in customers’ trust and loyalty.
When customers can trust that online or offline trade is secure, they will continue to purchase from that business again and again with confidence. Such security also helps to identify fraudulent activity early on and prevents costly losses in the long run.
With a strong brand identity, businesses can send out positive signals such as expertise and quality of their services or products, which may increase their customer base even further. A brand protection solution helps maintain this level of integrity, perfect for those looking to make sure their brand is protected and their reputation intact.
When it comes to businesses, protecting their customers should be a top priority. A brand protection solution is an effective way to do just that. It ensures that there are no counterfeit unsafe products for people.
This is particularly important to food manufacturing companies, pharmaceutical companies, toy and baby products manufacturers, and skin care industries which hold the safety of their customers in the highest regard.
By using a brand protection solution, businesses can monitor counterfeit goods, defend against pirate websites and fraudulent transactions plus eliminate dangerous products from reaching the market.
This way the customer’s safety is guaranteed and businesses can be confident in the quality of their products without risking the reputation of their business. Therefore, a brand protection solution provides peace of mind for both customers and for businesses alike.
Trademark protection is a major benefit of brand protection solutions, as it helps businesses differentiate themselves from their competitors by affording them additional legal rights to the use of their well-known brand name or logo.
In today’s world, having a brand identification is more important than ever – the stronger the brand identity you own, the better your chances are of securing customer loyalty. Moreover, by taking steps to secure trademark or patent protection, companies can actively safeguard against potential infringement of their intellectual property.
To sum it up, implementing a brand protection solution with trademark and patent protection has considerable benefits that every business should consider.
Reputation is an essential ingredient in any successful business. A brand protection solution can help protect that reputation, by providing diligent monitoring and enforcement of a company’s intellectual property rights across the internet.
With this kind of oversight, companies are better equipped to combat counterfeiting, cybersquatting, and brand abuse, helping to protect the integrity of the brand image and ultimately enhancing the reputation of their business.
Companies can then be confident knowing that their assets are guarded against potential misuse or abuse by unauthorized parties. Not only does this strengthen the businesses’ legal footing but also builds trust with consumers that their chosen brand will deliver a genuine product or service.
In this way, a brand protection solution goes beyond simple legal protection and becomes an invaluable asset for enhancing a company’s overall reputation as well.
The monetary benefits derived from Brand Protection in improving ROI are referred to as the hard recovery, this includes some of the following:
One of the key benefits of implementing a brand protection solution is increased revenue. Revenues that would have gone to the bad guys stay with the true brand owners. As well as this, businesses can benefit from increased sales due to improved customer confidence in their product or service.
When customers are aware of a company’s commitment to protecting its intellectual property, they are more likely to purchase from them – knowing that its products will be safe and genuine.
Better brand protection means that companies are more likely to be ranked higher in online search results and present a more attractive appearance to potential customers. SEO is critical for brands selling online as it greatly influences the amount of traffic that arrives at a website.
Over the past years, techniques of black hat SEO have been adopted widely, and to great effect, by counterfeiters in recent years. The fast turnaround of success that these strategies makes them a perfect tool for counterfeiters, who also typically seek to set up shop and make a quick buck, rather than founding a respectable, or legal, business. Some of the most common black hat techniques used by counterfeiters include keyword stuffing, domain squatting, and redirecting doorway pages.
When these threats are addressed this means more traffic going to the fake pages will be directed to the original brand. With the help of a reliable brand protection solution, businesses can expand their reach across different industries and markets while safeguarding their returns on investments made in developing a new product or service.
A brand protection solution is priceless for businesses – not only does it provide greater visibility into brand-related issues, but can also reduce costs. By preventing legal issues from arising in the first place, businesses don’t have to bear the burden of expensive civil litigation or trademark disputes.
This then leads to a decreased likelihood of costly legal fees. Overall, a brand protection solution can remarkably reduce overall costs associated with legal issues related to business activities.
Measuring your brand protection ROI is very important to ensure that the strategies you have put in place are efficient. In addition, by engaging solutions such as Red Points Brand Protection Solution, you will be able to improve your ROI. Ultimately, the consequences of not measuring your brand’s protection ROI could be devastating as it could lead to continuous loss of revenue, a bad reputation, and a lot more.
That’s why leveraging Brand Protection companies such as Red Points can not only protect your IP but also lead to more revenue for your business, ensure the safety of your customers and protect your brand integrity. Book a 15 minute free consultation to learn how we can help protect your brand’s future.