…he reflected on my question for a moment, then rocked back in his executive chair, hands clasped behind his head and inquired, “So, in your words, Ed, what exactly is Brand Value?”
Leaning in slightly, I responded, “Matt, if you don’t mind, I’m not going to use my words. I’d like to use your perceptions,” adding, “What car do you drive?”
His eyes followed mine as I glanced across to the perfectly polished, die-cast Carrera on his credenza and he started to smile. “You got me. Tell me more. But remember—my brand isn’t Porsche.”
“Not yet.” I offered.
What is the value of a brand? Of your brand? Do you know? If you don’t, there’s no way to tell whether it’s increasing in value or decreasing. A decrease spells disaster.
And once you have your benchmark value (more on this later)? Then you have to know how to build it.
Knowing your brand’s value and how to build it will help you propel your company toward the pinnacle of success. You’ll see better margins, market share, and profits that distance you from your competitors. Brand Royalty vs. those ruled by the whims of the marketplace, bowing to the demands of buyers.
Assuming you are not the foot-kissing type—how can you and your company lay claim to the throne?
Let’s take a look…
In the ensuing conversation with Matt*, we reached agreement that Brand Value lies In the Eye of the Beholder. But what defines that value?
If you look up Brand Equity on Wikipedia, there’s a well-referenced outline of multiple approaches for assessing a brand’s value. From corporate-level economic modeling to product-level price differentiation models to more end user-level, “values based” perception models. The summary concludes that, “Brand equity is strategically crucial, but famously difficult to quantify.” And that, “A more complete understanding of the brand can occur if multiple measures are used.”
But think about it. The value of your brand—no matter how you measure or track it—is a result of the value your brand holds in the minds of people. Your customers. Your end users. Your competitors. Your competitors’ customers and end users. Your peers. Because each one of these groups will interact with your brand based on the position of value it holds in their mind.
What affects that perception? That individual reality?
First of all, it’s personal. Put on your “evaluator” hat and think about the elements that follow in relation to a couple of brands. Let’s say the brand of: a) your neighbor’s car, and b) your office coffee maker.
7 Essential Elements of a Brand’s Value
Answer these questions for the car and the coffee maker.
How well known is the brand? How well do you know it? Do you know what its logo looks like? Can you recite its tagline? Have you seen any advertising or communications about it? Would your friends know it if you said its name? What color does it bring to mind?
What is the brand’s reputation? Do you like it? Its products? Have you heard others talk about it in a good or bad way? Does it have respectable associations, in your opinion? Has it done anything to affect your level of respect for it?
Is the brand appropriate for you? Is it meaningful for what you want, or need to do? i.e., Do you even drink coffee? Or would you ever even consider owning a luxury sports car? Or are you ambivalent?
What is the level of importance, in your world, for the brand or the products it encompasses? Do you care enough for the brand to matter to you? What, if anything, could the brand do to make itself more important to you? Are there aspects of driving or drinking your morning coffee that are important to you that the brands just don’t provide?
What is your experience with these brands? Good? Bad? Blah? Think of the total experience with the coffee maker —the way it looks, the ease of use, the efficacy, the quality, the reliability, the complaints you hear, any communication you’ve noticed about the brand. Is it a positive experience? Is it a delight? Or just blah?
This one starts to feed off three of the above—reputation, respect, and experience—and is a values-based judgment call personal to you. Do you trust the brand? Is the brand trusted by others? Would a high level of trust expressed by others convince you to trust it? Think for a moment about a brand you do trust. Why do you trust it? What has it done to gain your trust?
This is where we end up. Preference is the precursor to loyalty—the Holy Grail of brand relationships. So, let me ask you this: within a competitively similar set of brands, does the brand in question (car or coffee maker) have a perceived level of value in your mind, making you prefer it over the others you considered? If the answer is no, then they both have a lot of work to do. With you anyway.
These seven elements build value when they’re above the median line in the positive range. When they’re below the line, they impede value creation and can even decrease a brand’s value—which is to be avoided at all costs.
How does your brand stack up?
To know, first you must establish your benchmark.
Measuring Brand Value Elements
The best place to start is with a combination of qualitative and quantitative research. Define your brand audience segments and then the behavioral sub-segments within them.
The first is easier because your audience segments are your major brand audiences. These include existing and potential customers, end users, employees, vendors, and partners, as well as press, influencers, industry organizations, etc. The second segment gets trickier. You need to define the sub-segments within the first brand audience segments—especially your existing and potential customers and end users—who differ significantly in attitude, behavior, and motivation from one another.
In the 7 Essential Elements exercise above, you were the subject examining value for two brands. But (and I know you were thinking this), you’re just one person with one point of view, based on your individual experiences and values, likes and dislikes, and needs and preferences. However, there are others similar to you—in their behaviors, priorities, needs, wants and desires, and in their beliefs and value judgments. So, along with those “similar” individuals, you are part of a sub-segment of a larger brand audience segment.
Just as you fit into one sub-segment, others with significantly different behaviors, priorities, needs, etc., will fit into another sub-segment, the parameters of which you need to understand. There may also be a third sub-segment, or even a fourth—especially in consumer goods markets.
With this knowledge in hand, you can now benchmark your brand, its value, and the elements that create that value. The method you’ll use is a Brand Equity Study. This will measure the perceptions and attitudes of your brand audience segments and sub-segments using the 7 Essential Elements of Brand Value. Defining the parameters and makeup of each. The study will give you insights into why your brand scores high or low on each one.