A lot of people think it’s hard to measure a company’s brand. That’s because it often is. It’s easy to proclaim the immense value of brands like Coca-Cola, Apple, Nike. These companies have become synonymous with the term “brand” even to those not in the realm of branding and advertising. What’s difficult is evaluating the brand value of all the bajillion other companies that aren’t immediately recognized by a French fry flinging clown or an encircled three-point star emblem that makes you smell fresh luxury leather at the sight of it.

What is brand value?

Brand value is a term used in marketing and business to measure and assess the intangible worth or value of a brand. It is also referred to as brand equity. Brand value represents the financial and non-financial worth that a brand adds to a company’s products or services. Various factors make up the abstract equation that sums up brand value, the result not just of design elements and ad spends but things like perception, retention and feelings. All these things are a part of brand value and the resulting solutions can significantly impact a company’s profitability and success — long or short-term.

Some key components are:

Brand Awareness:

The level of recognition and awareness that consumers have about a brand. High brand awareness often leads to higher brand value.

Brand Loyalty:

The degree of customer loyalty and attachment to a brand. Strong brand loyalty can lead to repeat business and long-term customer relationships.

Perceived Value:

The perception of the quality and reliability of a brand’s products or services. A positive perception can enhance brand value.

Associations:

The mental and emotional associations that consumers have with a brand. This can include the brand’s image, reputation and values.

Differentiation:

The extent to which a brand stands out from its competitors and offers something unique or distinct. Strong differentiation can lead to higher brand value.

Consistency:

How well a brand maintains a consistent identity and messaging across all touch points, including advertising, packaging and customer interactions.

Brand Extensions:

The successful introduction of new products or services under the same brand name. Effective brand extensions can strengthen brand value.

Marketing and Advertising Efforts:

The investments made in marketing, advertising and promotional activities to build and maintain the brand’s image and reputation.

Customer Experience:

The overall experience customers have when interacting with the brand, including customer service, online presence and in-store experiences.

Financial Performance:

The financial impact of the brand on the company’s revenues and profits. A strong brand can command premium prices and generate higher margins.

Measuring brand value can be challenging and may involve both qualitative and quantitative methods, such as brand valuation models, consumer surveys and financial analysis. There are several methods and approaches that businesses and organizations use to measure brand value. Here are some commonly used methods:

Brand Valuation Models:

These models assign a financial value to a brand by estimating the potential future earnings attributable to the brand. The most widely used brand valuation model is the Interbrand’s Brand Valuation method. It considers factors like brand strength, brand loyalty and financial performance to calculate brand value. Other brand valuation models include the Brand Finance method and the Millward Brown method.

Customer Surveys and Market Research:

Qualitative data can be collected through customer surveys and market research to assess brand perceptions, customer loyalty and other brand-related factors. This data can help gauge the strength and value of a brand from a consumer perspective.

Financial Analysis:

Brand value can also be assessed by examining financial data such as revenue and profit margins associated with the brand. The Royalty Relief Method is one financial approach that estimates how much a company would have to pay to license its own brand if it were a separate entity.

Brand Equity Models:

Brand equity models like the Aaker Model and the Keller Brand Equity Model provide frameworks for assessing brand value. They consider dimensions such as brand awareness, brand associations, perceived quality and brand loyalty.

Market Capitalization:

For publicly traded companies the difference between a company’s market capitalization and its tangible assets can be considered as the value attributed to intangible assets like the brand.

Competitive Benchmarking:

Comparing a brand’s performance and financial metrics to those of its competitors can provide insights into its relative brand value within the industry.

Social Media and Online Analytics:

Monitoring brand mentions, engagement and sentiment on social media and online platforms can offer real-time insights into brand health and value.

Brand Metrics:

Track key performance indicators (KPIs) related to brand performance, such as Net Promoter Score (NPS), brand awareness, customer retention rates and customer lifetime value.

Brand Audit:

Conduct a comprehensive brand audit to evaluate brand elements like logos, slogans, packaging and messaging for consistency and effectiveness.

Brand Licensing and Partnership Deals:

The value of brand licensing deals or partnerships can provide insights into the perceived value of the brand in the eyes of other businesses.

Let’s do some maths, but with feeling.

It’s important to note that brand value is a dynamic metric that can change over time due to various factors including market conditions, consumer perceptions and competitive pressures. Therefore, it’s advisable to use a combination of these methods to gain a holistic understanding of brand value. And it’s important to also not lose trust in your gut, your intuition. Because at the end of the day brand, while sometimes a measurable science, is also both psychology and a form of art, and art uses abstractions and subtleties to motivate, bemuse, terrify or otherwise emotionally move its audience. And one cannot always succinctly commoditize inspiration.