How to value a brand

One of the questions clients ask marketing and branding agencies when undergoing a re-brand or a brand refresh exercise is how do we value it? 

Let’s assume a client has already attributed a financial cost to a re-brand. Remember, that’s the cost of doing the re-brand – not the cost of not doing a re-brand – which is harder to calculate but is equally important.

The value question of a re-brand is best answered by firstly examining its current value. If you don’t know the value of your existing brand you will struggle to value it after a change.

Back to branding basics

The main benefit of having a respected brand is that you can charge higher prices for the same product or service as your competitors and therefore produce higher profit margins.

The larger the price premium you charge – the greater the value of your brand name.

To re-iterate: the value of your brand is based on the price premium you are able to charge because of it. 

In practice, people attribute to brand value what they should really attribute to product quality, design, service and reliability.

If you possess a strong brand don’t assume that value is going to stay intact forever. There are companies that have dissipated back into remnants…if you have a valuable brand name, hold onto it; preserve the image.

Brand value is the most sustainable competitive advantage you can have. If you don’t believe that you have that power then you are, as George Harrison once sang, one of ‘them’.

What is a brand?

A brand is a cocktail of people, culture, visual identity, attitude, heritage, physical environment, emotion and language. It’s largely the embodiment set across different channels of ‘the way we do things around here’.

A brand is a way of creating a series of associations or connotations in people’s minds in such a way as it persuades them to ‘buy in’ to that product, event or idea. A brand is nothing without an audience. And a brand is only ever as good as peoples’ response to it.

Can you imagine a newspaper without any readers? A band without any listeners or gig-goers, or a product that no one buys? None of these could exist without their target audience believing in them.

I bet you can name all the brands featured above…and only half of the plants.

About Peter Davies

I'm a Manchester PR agency man. I work at RMS, the UK-based independent PR and marketing agency, I'm also a daddy and a football referee. Call me on 07779 033 016.
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