The Economic Value of Your Company Brand

brand-loyaltyI was a guest speaker for The Center for Business Modeling at a video/podcast on a subject near and dear to my heart: the economic value of a brand. Following is a summary of what I said on the podcast.

When people talk about a company brand, it is often expressed as sort of an abstract concept – we feel good about our brand — or perhaps not so good. Actually, a strong brand has a monetary value. For instance, it can be a boon to the stock price, making the entire company more valuable.  It can be a sales and profit accelerator by helping you sell more products and services at a greater profit margin. As David Reibstein, professor of Marketing at the Wharton School of Business, stated, “A valuable brand delivers return for the company on two dimensions. Either it allows the company to charge a premium price, or it adds more volume or market share.”

Your brand can also be a tool to attract top talent to your company. Lots of people want to work for companies that have a positive public persona. The company brand can also be a driver of merger or acquisition activity. The acquiring company always wants to know that they’re buying a strong brand and it certainly will make you a more attractive acquisition target.  And, of course, the right brand can be a company morale booster, which is vital for retention and recruitment. You will get people excited about coming to work for you.

High-value brands share five attributes:

  1. The brand is well known by the target audience (in a good way, of course).
  2. It differentiates you from all other competitors.
  3. It offers a clear and compelling benefit. People have a sense that when they do business with you, they get some personal benefit out of it.
  4. The brand is respected.
  5. It is timeless brand, not based on a short-term fad or market trend.

Your biggest objective is to make sure you have a differentiated brand and not a commodity brand.  A commodity brand is something where the main difference between brand A and brand B is the price that the purchaser pays for it. By contrast, a differentiated brand can deliver a shorter sales cycle, and much less, if any, competition, where you are able to drive premium price points.

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Forbes magazine performed a study in which they calculated the economic value of brands. Apple leads the list, with a brand value of $124 billion.  Rounding out the list are Microsoft, Google, Coca-Cola, IBM, McDonalds, GE, Samsung, Toyota, and finally Louis Vuitton, with a brand value of almost $30 billion dollars. On the other side of the coin are brands with declining value like Sears, Blackberry, (which used to be Research in Motion), H&R Block, Yahoo, and JC Penny. These brands definitely have some rehabilitation to do before they get back to having a strong, positive perception and strong economic value.

I will leave you a quote from that paragon of branding, Jerry Garcia, who said, “Success isn’t about being perceived as the best at what you do. It’s about being perceived as the only one who does what you do.” Jerry was right.  A strong and differentiated brand can put you way ahead of the competition.

Go forth and brand thyself!

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Christopher Ryan

Christopher Ryan has 25 years of marketing, technology, revenue growth experience. As both a marketing executive and services provider, Chris has created and executed numerous programs that build market awareness, drive lead generation and increase revenue.
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2 comments

  • Tyler January 26, 2015   Reply →

    I believe the distinction between the feeling of a brand and the actual value it provides is a critical distinction, as you mention. You can not go about improving the usefulness of that branding until that distinction is made clear.

    • Christopher Ryan January 27, 2015   Reply →

      Thanks Tyler. Your comment is spot on. The best brands are congruent because they reflect both the actual value and perceived value of the company and its products.

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