Brand Value Realisation: how to ensure others value your brand as much as you do
How much is a brand worth? It’s an age-old question that sits alongside other debates relating to returns on investment in marketing. In attempting to overcome misperceptions as the practitioners of “dark arts,” many agencies have developed proprietary methodologies that attempt to measure the actual monetary value of a brand. This is an effective means of creating an asset on a company’s balance sheet however, it is still a largely subjective exercise.
Brand valuation indices are impressively scientific and the companies that feature in their studies of most valuable brands have been proven to outperform the companies listed in other indices. Take Millward Brown’s BrandZ index and the performance of companies listed within that versus the S&P500 or the MSCI World Index in the example below.
This supports the view that investment in a brand’s purpose, story and competitive positioning can dramatically increase the value of the company it belongs to. This is particularly important in the build up to a capital event when a company is being bought or sold or even floated on the stock market. A recent example of this is when ARM Holdings engaged in a systematic development of their brand story, resulting in hugely increased engagement from investors and their broad partner ecosystem. When SoftBank acquired the business in 2016 the value of the business had grown from £16.78bn the time of the new brand launch to £24.3bn when SoftBank’s offer was made public. Masayoshi Son, SoftBank’s founder, credited shared vision and values as one of the major factors in the purchase.
Corporate advisory affairs often publicise, through more traditional PR activity, a business that is anticipating an exit event in the weeks or months leading up to a sale or floatation, however, this is nothing more than an awareness spike that may create a modest bump in value.
At Tayburn, we have a track record of working with businesses over a 12–24 month time frame using a robust and proven approach. We begin this process with an appraisal of the brand to understand the context and determine the challenges and opportunities. From here we work collaboratively to develop the brand’s purpose, which forms the basis on which the brand story is articulated. With this strong foundation in place we can then consider how the brand innovates to stay ahead of its competition and what experience it offers its key audiences — including customers and colleagues.
This process has been applied to a specialist insurance brokerage, Sure Thing! helping the company to smash through its first year sales target by 300%. Currently, we are delivering a digital marketing strategy that aims to increase the capital value of a high-growth financial platform, FNZ. And finally, with CORGI HomePlan, we enabled the brand to challenge British Gas because of the higher purpose that lay at the heart of their brand. In May 2017, as a result of a heightened market profile, the business was successfully acquired by a larger player.
It’s not about how much a brand is worth, it’s more about the contribution the brand makes to achieving a higher multiple for the business at an exit event.
So, to answer the opening question it’s not about how much a brand is worth, it’s more about the contribution the brand makes to achieving a higher multiple for the business at an exit event. And by having a clarity of purpose and a compelling brand story, company owners can ensure that others will value their brand as much as they do.