Brand risk has a financial and a reputation implication.

What is brand risk?

Traditional risk management does not provide brand risk a definition. It’s an output of other identified risk areas.

In simple terms brand risk can be defined as threats to the brand equity and to the brand differentiator.

Anything that threatens:

  1. the sustainabilityof the company’s brand demand
  2. or the company’s commercial freedom

Internally brand risk can be from:

  1. Poor manufacturing and/or service quality
  2. Poor engagement and comprehension of brand purpose by employees
  3. Poor stakeholder engagement and customer service

Externally brand risk can be from:

  1. Changing customer behaviour that leads to drop in sales or boycott of the brand.
  2. Retail space capturing tactics by competition by buying out the stocks or damaging it. In the virtual world, crashing the retail site or hacking it.
  3. Regulatory changes brings legal opposition to the brand in doing business within a region or market segment.

How complicated, time consuming and expensive is it?

Undertaking a brand risk study is quite simple and takes one working week, with a team of 1-2 people, to complete.
You allocate the environmental and regulatory to one member whilst the other does the brand communication audit.
This can be done within two working days. On day three the findings are grouped under financial and reputational risk.
On day four the mitigation plans for each are outlined and teams identified and you have your brand risk covered.