Many people think that the products, services, and assets of the company are the only valuable things. But brands name and company’s reputation are also equally valuable. Today, we’ll discuss what is brand value; its differences from brand equity, its importance, and how to measure and build it.
What is Brand Value?
In simple words, you can say the brand value is the financial and monetary worth of the brands. If a company is acquiring the other firm, merging with other businesses, or wants to use the brands identity, logo, and name in order to sell its products. The brands value has the amount that they would pay for it for using the right. It’s the market-based worth.
You can replace the term brands value with cost. Here it means the money that you invest in designing, executing, creating, developing, and promoting a completely new brand to the same level as the older one. The cost or amount comprises hiring an agency to design your brands, the time and energy you invest in marketing and promotion on social media platforms; advertisement cost, PR, sponsorship, and other costs.
Brand Value vs. Brand Equity
The brands’ value has the financial and monetary elements in it to know the brands worth. The brands equity comprises the perception of customers and how positive they think the company is. Customers that choose your brands over competitors show their loyalty to your company over time, and they add to the brands equity.
You can consider brands equity such a factor that impacts the brands worth. When it comes to establishing brands equity, you’re going to add traits that would make your brands valuable. They’re like aspirational values, positive association with service and equity, and brands recognition. All of these factors would help you to increase customers’ loyalty, revenue, and customer spending.
Brands can have their values and worth without establishing their equities. For instance, a company invests in marketing and promotional campaigns before launching a product. The company develops its worth and value before its customers could see it. Brands equity has an association with brands purpose and reputation. They’re such personal values of the brands that allow customers to develop a bond with the company.
Importance of Brand Value
Young enthusiastic entrepreneurs invest a lot of capital and resources in establishing brands awareness; so that the customers would identify their brands and buy from them. The brands values impact the revenue and profitability of the companies in different markets. The company would have a high ROI if customers like its brand and buy from it.
If a company has a higher customer loyalty, then it would discourage new competitors to enter the market and influence the minds of loyalists of the first brands. Companies should conduct their market research and analyze the market before making any step of entering it.
Branding is an intangible asset of the company that has a lot of financial and monetary worth. It’s important to know the worth of your brands before making any investment; make sure that the stakeholders of the company are aware of it.
How to Measure Brand Value
You can measure the brand value in different ways, and some of them are as follows;
NPS (net promoter score) Valuation
NPS is a type of measure that determines whether your target customers are promoting your brands or not. If you want to measure your NPS, then you should question your target customers whether they would refer your brands to their social circle; and ask for their rating from 0 to 10. It allows you to know how many people like, trust, and recognize your brands.
The focus of this approach is on the capital and money the company is generating. You should pay heed to the financial measures of the company like future revenue, cost-saving, cash flow, and income flow.
You should estimate the cost spent on launching and developing your company. You can easily do so by adding up all the expenses from beginning to end. While estimating the cost, don’t forget to include expenses like trademark, branding agencies, contracts, salaries of employees, and marketing and promotional expense. Resultantly, you would know the money you have invested in building up the company. It doesn’t have the capability to show the existing brand value.
It’s a type of measure that allows you to outline the valuation of your brands based on the market. This is the simplest and easiest approach to knowing the cost of the same companies in the market. However, if you want to find the exact and clear brands value, then you should pay heed to the other market indicators like stock performance.
How to Build Brand Value
Some of the main approaches to building your brand value are as follows;
When a company offers excellent customer service, it amplifies brands equity. Customers expect quality products and services from their brands along with good customer service. Studies have shown that customers would pay higher prices for the brand if they have a good experience with it.
Sponsoring & Ambassador
When musicians, influencers, sports stars, and celebrities attach themselves to specific brands, then it amplifies their brands recognition and awareness. The type of brands ambassadors you choose would tell the company’s social and ethical values.
Advertising & Marketing
Marketing and advertising have helped people to move from brands awareness, recognition, and understanding stage. The process of brands value starts with marketing and promotion that the customers recognize the company’s values, and it establishes in the minds of customers.
Conclusion: What is Brand Value? How to Measure & Build It
After an in-depth study of what is brand value; its importance, its differences from brand equity, and how to measure and build it. We have realized that brands valuation is very important for businesses and companies. If you want to build it, then you should follow and practice the abovementioned guidelines.
Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. Other than that, he’s a fun loving person.