Thursday, March 26, 2015

Brand Valuation vs. Brand Equity Measurement

Brand valuation is just what the term implies – it assigns a monetary value to the brand. This helps people understand that a brand is an asset that must be managed and protected. Brand valuation can transform CFOs into brand advocates. It is also useful in M&A situations. Many companies’ valuations far exceed the sum of their tangible assets. While this can be due to many factors, research has shown that brand value is one of them.  Online companies, in particular, have valuations that far exceed their tangible assets and often the brand itself is a substantial part of the company’s overall value.

Brand valuation’s usefulness is limited to the benefits that I have described above. Beyond these benefits, brand valuation offers little help in managing the brand or increasing its equity or value. This is where brand equity measurement can help. Our system of brand equity measurement measures each of the five drivers of customer brand insistence – awareness, relevant differentiation, value, accessibility and emotional connection. Further, it identifies key brand associations, brand personality, brand vitality, brand loyalty and brand positioning opportunities and vulnerabilities vis-à-vis the competition. All of these inform specific actions that can be taken to strengthen the brand.

Peter Drucker said, “If you can’t measure it, you can’t manage it.” Brand equity can be measured. Brand equity measurement systems do this. So, if you are responsible for managing your brand, you should be measuring its equity and all of its equity components so that you can diagnose and solve any problems and identify and seize any opportunities.

I wish you great success in measuring and strengthening the equity of your brand.

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