How to measure the value of a brand

In this next few minutes, we explain how marketers and marketing departments can measure the value of their brand. This explanation takes into account the value that branding plays in all aspects of marketing.

The process that we define below is uniquely different from many other estimations of brand value, and particularly those that transform brand equity into a monetary value that can be input into financial reports. This is because these measures miss the valuable nuance that explain the differences between brands.

A brand can be immensely valuable one day and completely unpopular the next. And although major brands aim to counter this volatility, the vast majority of businesses are affected by changes in societal and technological trends that make monetary estimations difficult to assess.

We must first briefly define what we mean by a brand by considering its origins as a measure of product consistency. Merchants required a way to make sure the product they were purchasing was of expected quality. Through time, this evolved into more than just a perception of product quality, but a perception of emotional value that can be enhanced through promotional activities.

Realising this, marketers sought to use storytelling as a way to connect a product or service's qualities with the emotional requirements of a target market. And in doing so, branding became a specialist skill. And at its most advanced, branding can incorporate almost every aspect of the way a business can be perceived by a customer.

It is the relationship between every aspect of a brand that makes a brand uniquely valuable over time. However, marketers often only considering elements of design when discussing branding. This is understandable, as these elements are typically within their control.

However, when we define a brand, we consider every perceptible way a business can create an impression. This includes aspects of design such as the company name, logo, and colours as well as aspects of the product or service such as the website, user interface, product design and product materials. It will also include other aspects of the business such as its personnel, culture, history, and management team.

We devised the following framework to evaluate five characteristics that all businesses possess in order to compare the relative value of every brand.

A brand’s essence combines several aspects of a company’s inception and development. These include the company’s founders and their skill sets in developing and honing the mission, as well as its core competencies. This also provides greater context for the development of the company’s name, design assets and market positioning.

The company’s brand essence may also be impacted by changes in ownership through the course of a business’s history. For example, if the business receives investment, is acquired or listed, it may impact its future, which may also impact the value of its brand.

Every time a person is exposed to a brand, it will have an emotional impact on them. This is a natural consequence of conditioning. However, the degree to which this has value depends on the quality of that engagement and the emotions that it evokes.

Through time, the affinity that customers have for a brand is also affected by the regularity and continuity that it develops an emotional connection with customers, ensuring that the dialogue remains relevant and current. Storytelling usually provides the means to keep reinventing the engagement with customers and the opportunity to move beyond purely functional purchasing messages.

The more successful a brand is at developing a lasting emotional value, the more valuable the brand becomes. This is essential for most businesses, as the majority of customers are unlikely to be in the market for a product or service when exposed to a brand. However, when they are, this lasting impression will influence their decision-making.

The success of many brands that we know and love today can be attributed to the role of celebrities. This term also includes influencers and industry experts paid to promote the brand’s activities. This may also include employees if they have a persona above and beyond the profile of the business.

We therefore consider the extent to which the influence of individuals has had on the value of the brand. This is especially relevant for new brands that the public have had little time to develop familiarity for. It also often applies to digital businesses that have little or no real-world presence and little opportunity to create a distinct emotional impression.

However, celebrity associations don’t guarantee lasting brand value. Celebrities have comparatively short periods in the public spotlight, and their own brands are even more volatile than businesses, for the most part. For this reason, a brand may build lasting value through the selection of multiple celebrities over time with similar attributes.

The perception of a brand’s products and services, as well as the category they represent, can have a significant impact on the brand. This innovation can be represented in many ways, and typically provides the necessary fuel for marketing campaigns and storytelling. This combined with the brand’s essence also provides authenticity for the brand that can transform the creative process and elicit a much deeper emotional resonance over time.

There are many types of innovation. The most notable is product or service innovation, which refer to perceptible differences deemed market-leading compared to the competition. Digital innovation then refers to perceptible differences in the business’s digital capabilities, including the website design, user experience and its ability to connect with audiences across social media.

The company’s culture and its approach to issues of sourcing and sustainability may also be perceived as innovative and therefore have an impact on the brand’s value. These aspects have also increased in value through time.

The development of any brand is inconceivable without exposure. This is therefore a brand characteristic that is easier to measure than other aspects of brand value. And even once universal awareness has been achieved, continued investment is usually required to maintain a brand’s presence.

However, high exposure doesn’t necessarily result in brand value. For example, a brand that invests major marketing budgets in promotional activities may only achieve limited success without the value gained from the other brand characteristics mentioned above.

We use these five characteristics to assess the value of any business’ brand. We also use this to compare this assessment with the value of other famous brands using the same methodology. This provides the necessary evidence for them to make their marketing more effective.

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