R= Rational (or Functional) Benefits
This is the area where companies traditionally focus their time and money. It’s the stuff you sell, the checked boxes on the RFP, the “better/faster/cheaper” offer you are making.
E²= Emotional Connection
Two factors here, hence squared. One is the strength of your employee culture and its commitment to the cause. The second is the emotional connection you have with your customers/strategic partners.
P= Perception
 At the end of the day, how does the market rank you compared to competitors?

Let’s put this formula to work in a scenario. Say your company sells a complex software application. When looking at the RFP checklist, you can pretty much answer all the requests for feature/functionality. Even better, you’re software has some cool bells and whistles others don’t. So from a “Rational” point of view, on a scale of 1 – 5, with 5 being the most functionally rich product the market wants, you’re a solid 4. Congratulations!

Now, let’s assume you have an average level of employee zealotry and an average level of customer enthusiasm (each scores a 3 on the 1-5 scale). Pretty typical of a technology-driven company.

As far as the market’s “Perception” of you, unfortunately you’re just not that well known … and those that know you are confused about what you really do. So, rather than being #1 in your category, you ranked as the 7th most recognized and understood brand.

So, how does this play out:

4 x 3²  = 36. Divide that by 7 and you have a BV Index of 5.15

Now, what can you do to get a better Brand Value Index (and stronger financial results)? Focus on “E.” First, because of its weight factor, making even minor efforts to improve here will cause the greatest shift. Second, just adding more function/features to your Rational benefits barely moves the meter, yet requires lots of R&D investment.

Let’s try this scenario again. Your Rational Benefits are still a 4. But you invest in creating emotionally charged and highly motivated employees, which has pumped up your employee cultural score (aka “Inside E” or E_i) to a 5. You’ve also effectively communicated your brand value proposition in a meaningful, emotionally based way to your customers and partners. This effort (aka “Outside E” or E_o) brings your score up to 4, for an average E of 4.5.

4 x 4.5² = 81. Wow! That’s a huge jump. It should be expected, then, that the market has a different “Perception” of you. They get what you do, like how you do business, and want to be associated with your organization. Let’s say you now rank 4th in your industry. 81 divided by 4 = 20.25.

A Brand Value Index of 20 versus 5!

Even if you only converted half of the 400% increase in BVI to your revenue numbers, one should expect to see revenue increase by 2x today’s figures, just by focusing on the Emotional connections being made every day with your people, your customers, your partners and the other stakeholders. See how we move our clients’ “E” >