A distinctive brand is good business, of course. But you’d be surprised how important is to a firm’s performance. We studied how customer perceptions of brand differentiation to stock price over the course of 11 years in 275 “monobrand” companies such as AT&T, Krispy Kreme Doughnuts, and Reebok. (Customer -perceptions data came from Y&R’s Brand Asset Valuator survey.)

We the firms into two groups for each year: The first those whose brands, customers felt, had become less . The second included those whose brands had become more . We then looked differences between the companies’ annual risk-adjusted stock returns. Curiously, we saw no effect of changes in brand differentiation on stock in the years the changes occurred, but we did see a pronounced delayed : One year later, firms whose brands had become more distinct those whose brands had become less differentiated. Specifically, the average next-year risk-adjusted return for firms with increased differentiation was 4.8%, while the for those with decreased differentiation was -4.3%.

That brand improve stock price is not surprising. But the lag we identified has important for companies. In simple terms, while individual consumers differentiation directly and react in real time (buying more Coke, say, as marketing increases differentiation), financial markets, it appears, don’t until they see the impact on earnings later on. The markets don’t seem to anticipate the future of improved differentiation—or perhaps they don’t recognize the change in differentiation in the first place.

Though managers often think their voluntary disclosures have little impact, it’s been shown empirically that disclosures, ranging from new product to explanations of financial results, affect financial-market such as share price, trading volume, and bid-ask spreads. If companies are to reap the full and immediate of brand differentiation, managers need to do a better job of communicating their brand (and its intangible outcomes) to the financial community.