Keith Goldstein is the President and Chief Operating Officer of VerifyMe, where he leads operations and product strategy and development.
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With each new step in our technological evolution, new risks and vulnerabilities open up for businesses and their IP. Whether it’s online risks associated with e-commerce shopping or more sophisticated forms of counterfeiting, businesses that don’t prioritize brand protection can face tremendous threats in the future.
I’m the president and chief operating officer of a company that’s working to counter counterfeiting technology by using cloud-based solutions and smart packing technology. Along the way, I’ve filed 10 patents focused on brand protection, security printing and manufacturing and transaction control processing.
Based on my experience in the space, I’m finding that right now, U.S. businesses are the most impacted by counterfeiting of any country in the world. In total, U.S. companies account for 24% of the total value of counterfeit goods seized globally.
These developments have forced many companies to invest large sums of money into consumer and brand protection. However, to truly tackle the counterfeiting problem, which can soon account for more than $1.8 trillion worth of goods, companies need to take the initiative to prioritize brand protection.
In this article, I’d like to discuss how to increase return on investment with brand protection and the various ways a comprehensive program can benefit brands.
What Is Brand Protection?
Brand protection is the conscious effort by brands to protect their products, intellectual property, trademark and brand identity from theft and counterfeiting to ensure their customers purchase safe, authentic goods. There are many sources of brand fraud and counterfeiting, including online pirating, IP theft, trademark squatting and the physical counterfeiting of goods.
Brand protection strategies from companies like mine often include:
• Track and trace technology: Track provenance from suppliers and partners to discover compromises in supply chains.
• Verification: Enable extra layers of product and package security before the purchase of goods to verify their authenticity.
• Business intelligence: Use automated online monitoring of your brand and e-commerce network to uncover IP violations and the source of online counterfeits.
• Advertising and social media monitoring: Track online mentions and impersonations of your brand without your express consent.
• Trademarking: Establish the legal basis for intellectual property and branding materials.
Each practice has an associated cost, such as annual online monitoring fees, physical security labels and secure coding with backend analytics to track, verify and set up threat warnings for a brand’s enforcement team.
Calculating Brand Protection ROI
Generally, we separate brand protection strategy into two categories of ROI.
• Cost-based ROI: This is the monetary value achieved from reducing theft, supply chain compromises and illegal counterfeiting. You can calculate cost ROI by looking at the monetary value of online traffic going to rogue websites or even the costs saved from mitigating losses or compromises in your supply chain.
• Value-based ROI: Value-based ROI is a little more nuanced and can involve various calculations, including the increase in customer lifetime value associated with higher trust or the increase in brand valuation by improving your reputation through various measures.
To be clear, it’s important to choose the proper metrics and compare them to your business goals. However, to accurately calculate the ROI of brand protection, you need to weigh the cost of implementing brand protection strategies with the potential benefits.
Five Ways To Increase Your ROI On Brand Protection
1. Reduce losses from theft and fraud. It’s important to remember that counterfeiting losses are exponential for businesses. Not only do all of the costs associated with manufacturing that product come at a loss, but also so do all future profits and revenue when a lifetime customer no longer trusts your brand. According to a study from Incopro, 52% of consumers who purchased a fake good from a brand lost trust in that brand.
The easiest strategy to begin protecting your brand legally is to register its trademark and IP. This protection will give you the legal right to track and report any potential counterfeiters and press charges using any legal means available, such as cease and desist.
2. Eliminate counterfeits as your largest competitor. Let’s use luxury brands as an example. The clothing industry alone suffers from more than $26 billion in theft each year. Because luxury brands have a unique style that can’t necessarily be replicated by their competition, the counterfeit market sold under that brand name can often represent a much larger source of competition than their luxury brand competitors.
Start by tracking your brand online through Google searches or business intelligence software. Through these searches, you can identify counterfeiters and report them immediately to the proper authorities.
3. Strengthen partner relationships. As important as brand protection is for consumer trust, I believe it’s arguably more important for partner trust. Vendors and retailers that get caught accidentally selling fake products under your brand name pay a hefty price for their reputation. Communicate your brand protection strategies with partners to help strengthen relationships and add extra security for your goods. In addition, I also encourage all partners to sign NDAs for their personal brand’s protection.
4. Provide additional opportunities for consumer engagement. Speaking of collaboration, you should explore ways to use brand protection to engage with customers using technology they are already familiar with, such as their phones.
5. Free up internal resources with automation. Finally, if you already implement internal brand protection strategies, your business can consider automation. Determine where you would like to reduce manual labor and error or gain a clearer picture of your supply chain and vendor network, and look for solutions that address those goals.
Hopefully, by educating more brands on the profit potential of brand protection and high ROI, companies will see the importance of prioritizing these measures to protect them and their customers from fraud.
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