Brand Victory – or Success –
is Measured in Terms of
A brand’s value is determined by the worth of intangible brand assets, contribution to shareholder value, and brand equity.
Because developing a brand portfolio is a long-term investment, company brands must be counted as an asset and deliver ROI to maintain their value. Brands, specifically, are gauged and valued by customer perception and are therefore counted as intangible assets. This combination of immaterial goods measures the brand as a reputational asset, and is purely dependent on customer perception.
Measuring a Brand’s Worth
Brand value, the calculable worth of intangible assets that relate to the brand, is measured at three levels:
- Company: Calculates the value of intangible assets from a total company value
- Product: Comparison of equivalent products
- Future Earnings: Predict future earnings from the brand and calculate net present value
Brand equity is dependent on brand perception and association. Brand perception has the most influence on profitability but is typically difficult to measure because it is dependent on emotional consumer responses. Brand equity can be measured from a set of brand metrics that include:
- Knowledge: measures market awareness of your brand
- Preference: measures a brand’s competitive position in the market
- Price: measures a brand’s financial value through marketing (share, revenue, lifetime value, price premium, transaction value and growth rate)
Investing in your brand
Part of developing an ongoing strategy for brand development includes defining how much profit should be invested into your brand. There are a number of variables that can influence marketing expenditures, and possible budget percentages:
With an adequate investment into brand development, the average percent of total revenue required for continual brand development will decrease over time, and while investing in brand development is by no means one-size-fits-all, companies can target a range of expenditure that fits their marketing needs. Not prioritizing or designating the appropriate amount of resources to adequately develop a brand strategy will cause your company to reach a success ceiling. Brand investment is essential for company growth and survival.
Chronus, a mentoring and talent development solutions company, expanded customer reach by reinvigorating their master brand and implementing a fresh rollout of integrated marketing tools. Learn more.