A strong brand is a significant asset to any business. Nike and Coca Cola are more successful than no-name sneakers and unknown soda due to the power of the brand behind the products. But how can you assign a value to something which seems so subjective? If you are wondering how much your brand is worth and how to increase your brand value, this article is for you.
What is Brand Value?
You may have heard the classic definition of brand value by Philip Kotler, which is often taught in MBA classes and marketing courses.
According to Philip Kotler, brand value is directly related to the perception and mindset of prospects and customers. It reflects the direct and indirect brand experience of what they have seen, heard, learned, thought and felt over time.
Is Brand Value the Same As Brand Equity?
If the term brand value makes you think of dollars and cents, you’re partly correct.
When customers know and love your brand, they are willing to pay more. This is known as brand equity. In other words, brand equity is the price above the product’s market value that consumers are willing to pay. Brand equity and brand value are linked, but strictly speaking, they are not the same thing.
Why Is Brand Value Important?
Let’s imagine you’re negotiating the acquisition or merger of a major brand. If you were taking over Coca Cola, you would be buying a lot more than the recipe for a caffeinated cold drink. You would be benefiting from the name, logo and other brand elements that consumers instantly recognize and trust.
Brand value is a fairly modern phenomenon. In the past, consumers relied on product quality and value to make purchasing decisions. The advertising boom of the 1960s turned certain businesses into brand names.
With the emergence of modern marketing, companies could choose to associate themselves with positive characteristics such as style, elegance, trustworthiness, security and innovation. This is essentially building a brand - a key element of any marketing strategy today.
Pretty much everyone agrees a strong brand is valuable - the tricky part is putting a number on that value.
How Is Brand Value Calculated?
Your brand is a valuable asset. With other assets, such as your house or your car, you can easily do some research and figure out the going rate. Calculating the value of a brand, however, is more complex.
We consider brand value to be a measurable concept encompassing the total net worth of your brand. Key factors include brand recognition (have consumers heard of you?), brand image (how do consumers perceive you?), brand usage (are customers actively buying from you and using your product?) and brand loyalty (do customers stick with you over the competition?).
One simple way to gain insight into your brand value is to send brand surveys to your customers. Direct customer feedback will show you how people perceive your brand.
With brand analytics technology, you can accurately measure your brand awareness and track levels of recognition, popularity and loyalty among specific relevant audiences. This helps you make better-informed decisions related to your brand.
If you are spending time and budget on brand marketing and campaigns it is vital to measure the impact of what you are doing. After all, an IT manager or accountant can easily point to cost reductions in technology systems or show increased profitability. Brand managers today also need to be able to show how their brand has increased or decreased in value over time.
What Makes A Brand Valuable?
Valuable brands have a few things in common. A brand is considered valuable if it’s:
Highly recognizable (people know who they are)
Positively perceived (people have a good view of them)
Popular (people actually buy and use the products or services)
Have a loyal following (customers are ambassadors of the brand)
How to Increase Your Brand Value
Every year, the Financial Times creates a ranking of the world’s top brands based on business performance, market share and consumer perception. Let’s take a look at how the top brands got to where they are today and how you can learn from their success.
1. Create the Perfect Customer Journey Like Amazon
Amazon is the world’s number one brand, valued at $401.1bn. What’s their secret?
Amazon has become synonymous with great user experience. Amazon started off by selling books online – not exactly ground-breaking. The impressive part was the speed and convenience, which consumers have come to expect as standard.
The key takeaway here is to make it easy to buy from you. If your customers don’t feel good when interacting with your brand or if your processes are complex and difficult to follow, then they have no reason to stay loyal to you.
So, put yourself in your customers’ shoes and take a critical look at your platforms and processes. Is your website fast and easy to navigate? Does it have a mobile-responsive design? Regularly check your website on different screens to ensure that it’s user-friendly.
Don’t stop at implementing a good web design and interface – try to uncover your blind spots. Call your customer service team with a question or at least listen to some customer calls. Download any gated content on your website and see what email sequences you receive. Buy a product and try to return it. You might be surprised at how customer-friendly, nor not, some of your processes are.
By making the user journey as pleasant as possible, you can significantly increase the value of your brand.
2. Know Your Target Audience Like Apple
Apple is the third brand on the list, valued at $219.1bn and is widely considered to be one of the most iconic brands of all time. All of Apple’s products - the iPod, the iPhone, the iPad – have been a huge hit with consumers and fans willingly waiting in line for hours to get a new product as soon as it is released. So, what makes the Apple brand so successful?
Apple is known for highly original and creative advertising that goes beyond products and features and taps into your emotions. For instance, when Apple launched the iPod, which at the time completely revolutionized the “Walkman” product category, their tagline was “1000 songs in your pocket”. Note how they didn’t focus on the technical specs or product features.
Apple has shown time and time again that they truly understand their audience. The product design is slick and easy to use, and you often see celebrities sporting Apple products.
You might not have Apple’s budget for incredible Super Bowl TV commercials or a partnership with Samuel Jackson. However, you can tailor your marketing messaging to address customer needs and leverage influencers in your industry. Understanding your customers and appealing to their needs is the cornerstone of building a strong brand.
3. Be Different Like Tesla
Tesla is number four on the top brands list. What makes them so successful?
Tesla’s electric cars have turned the more than a century-old industry upside down and are a serious threat to traditional automobile manufacturers. They dare to challenge current industry standards and go where their competitors can’t/won’t.
Your product might not be saving the world from climate change, but you can make an effort to stand out – even if that means breaking out of your comfort zone.
Being truly unique enables you to distinguish yourself from the competition. As long as you stick with your core company values, you can’t go wrong with being different!
Your brand is a valuable business asset. The world’s most successful companies are also iconic brands.
Brand value is measurable. Consider looking into brand analytics software so you can assess your levels of brand awareness, usage and loyalty among your target audience.
Take inspiration from top brands to increase your brand value. Customer-centric processes, effective marketing and standing out from your competitors will enable you to build a high level of brand awareness and loyalty.
Interested in learning more? Check out The Ultimate Guide to Brand Awareness here.