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What is brand value in marketing? A complete guide

October 18, 2022

Karen Chandler

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For many years, businesses focus on building up their products and services to increase revenue. However, global businesses now focus on increasing their brand awareness and brand value through their long-term marketing strategies.

But what exactly is brand value, and why is it so important in today’s marketing and business landscape?

Below is our full guide to how to implement and measure the success of this important metric

What is brand value, and why is it important?

It represents the emotional connection consumers feel with a product or company. It’s what makes them loyal to a certain brand, and more likely to return in the future.

It can be created through various marketing efforts, such as creating a unique identity, developing a strong relationship with customers, and staying true to company values.

Beautiful young mother with her little baby boy at the supermarket, shopping, looking for brand value

When done correctly, these activities can result in increased profits and a competitive edge in the market.

This measurement has become increasingly significant for every business and has changed the way companies conduct their marketing strategy and optimizations. Your brand can now be your greatest asset for your marketing activities, playing a key role in building trust & rapport with a prospect before they make a purchase.

Customers can reflexively judge the value of a product or service based on what they associate with the brand. So, by increasing the perceived value of your brand, you can attract consumers to your services or products.

How brand value has changed business marketing strategies

In the current business environment, bringing more value to your brand is essential. Consumers do not only judge your products and services based on the quality and value they provide, but also on the brand associated with them.

This has driven marketing strategies to focus more and more on brand awareness and customer retention. This could be by demon stationing the vision, expertise, and values of your brand and how it is then reflected onto your consumers. Focussing on value can then lead to better customer retention and most importantly, sales.

What elements make up this measurement?

Many factors. It’s important to understand the components of your brand to inform your marketing strategy, exposing opportunities where you may be lacking.

Some elements include:

The trademark or logo

Advertising strategy

Digital assets

Customer retention

Engagement levels (on social media or through email marketing)

Building your value

So, now that you understand the elements that make up the measurement, how can you start to build it for your business?

Here’s what you should focus on to build your brand equity and therefore increase your value:

Marketing strategy

Marketing strategies help you raise awareness of your brand, as well as the value of your products or services. This then allows you to create a long-lasting impression on your customers and build long-term brand loyalty and equity.

Customer experience

Providing a great customer experience is a powerful way to boost brand equity. In addition to quality products and services, customers increasingly expect a good experience from brands.

Research has shown that many are willing to pay more and choose brands ahead of their competitors when they’ve enjoyed a positive experience.

What is the difference between brand value and brand equity?

Brand value and brand equity are frequently confused for one-another. However, there are some fundamental differences between the two:

Brand equity

Brand equity is part of what makes up the brand value of your business. It measures customer perception of your brand and how their personal beliefs and values align with your business. You want customers to create positive perceptions and assumptions about your brand; this can be done by focusing on strategies that increase positive customer experiences and improve your customer journey.

Brand value

This is a financial gauge of your brand equity. It follows the revenue generated as a result of marketing strategies and brand awareness. Brand equity may contribute to your value through how customers perceive your brand. The more loyal a customer is to a brand, the more likely they are to spend more.

How can we measure this?

There are a number of ways to measure the value of a brand based on customer perceptions and the financial success of the brand. It can be difficult to properly measure your brand value without a solid strategy in place.

The first way you can measure the impact and value of your brand is to gauge what your brand is worth to other companies and get a valuation from companies in your sector. You can get an average of these figures to get a rough idea of where you stand in the market.

You could also execute a cost analysis between how much money you invest in your brand and the subsequent revenue generated. Furthermore, you could also reach out to customers to see how they value your brand and services, and how much they are willing to pay.

Why is it important to measure the value of your brand?

Measuring your value is very significant for a couple of reasons. It can be good to determine the value of your brand, reputation and customer loyalty to compare where you stand alongside your competitors.

Reputable brands have a higher value, not just from a financial point of view but also a higher value to their customers.

Methods of measurement

There are multiple ways in which you can accurately measure your brand value.

Below, we have listed a few ways that can help you to measure the value of your brand and how to track its success:

Measure by cost

You can measure your value by calculating how much it costs to build your brand.

The first thing you need to calculate is all the costs you put into your brand; this mainly includes expenses like third party branding agencies, trademark costs, salaries for employees, marketing activities, and any other costs associated with building your brand.

This will then give you the overall cost or “value” of your brand. However, it’s important to mention that this does not include the qualitative value your brand will have to your customers.

Measure by your markets

You may choose to measure your value by evaluating other brands within their market and comparing their worth to your brand.

The best way to calculate this is to either ask someone to evaluate your brand, or calculate it based on the stock performance of companies in the same industry as you. This will provide you with a good overview of where your brand stacks up to your competitors.

Measure by customer experience

A good way to measure the value of your brand to your customers is to measure and assess qualitative data. By using customer experience data, you can see how your brand is perceived in comparison to your competitors.

This will give you a good understanding of the qualitative brand value of your customers. Loyal customers will also be more likely to invest more in your brand through your products or services.

You can also calculate the cost to your current customers and extrapolate this data for forecasting purposes. This is also known as your customer lifetime value.

By doing this you can predict possible future revenues and profit for your brand and calculate your value this way. Customers are always good to measure and are the key focus of brand awareness strategies.

Measure by income

This is one of the best ways to evaluate the current value of your brand. It looks directly at the income being generated by your brand through multiple different streams and channels from your sales and marketing.

To execute this, look at all the income being generated by your business, and analyse which streams can be attributed directly to your brand; could be brand awareness campaigns or any other outreach you have done for your brand.

Measure by total income

When you measure your value by total revenue, you obtain a very accurate valuation of its worth.

Once you gather the data on the value of your brand and what it means to customers, you can then expand the data and make predictions based on scaled-up data.

How can Nepa help you?

Nepa can help you build your value through our state-of-the-art range of consumer insights services.

We’ve worked with some of the world’s leading brands – including Klarna and Disney – to boost their value by combining actionable data with input from our team of expert analysts.

Our service range includes:

Marketing mix modelling – We continuously optimize your current media investments to measure the impact they can have on your long-term and short-term branding and sales. So we can help you to make the most of your marketing mix model and capitalize on hidden opportunities with your marketing channels.

Brand health tracking – The continuous tracking of customer sentiment puts your brand in context as well as your value. By utilizing your weak points, we make clear strategic moves to ensure you stay one step ahead of the competition.

Willingness to pay – We believe true brand equity is how much consumers are willing to pay for your product or service. The WTP price choice-based modelling approach measures the relative value that shoppers would pay for your products or services compared to competitor brands.

Blog Posts

Market research consulting services

June 13, 2022

Karen Chandler

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Nepa provides market research consulting services to leading organisations. Our offering encompasses a broad range of consumer insights solutions to help businesses grow and become more profitable.

What is market research consulting and analysis?

Market research consultants are experts at conducting targeted research on behalf of clients. They uncover new opportunities and make data-driven optimisation suggestions to marketing strategies, with the intention of generating a higher return on investment.

Market research consultants use qualitative data – like surveys and questionnaires – and quantitative data to evaluate customer experiences, brand positioning, and the competitive market. They highlight both the weak and strong points of your marketing strategy and make actionable suggestions for improvement.

Why choose Nepa?

We’re proud to have worked with some of the most well renowned global brands, including H&M, Spotify, and Kellogg’s. Here’s what one of our clients say about our market research consultancy services:

Success stories

We chose Nepa as a brand insight partner after doing a study with them where they really showed their skills in understanding our brand and our opportunities. Since this is a global assignment, the collaboration will be an important component in our strategy going forward since our brand’s strength is of highest priority for us.

Eleonore Säll, Executive Vice President of Global Brand
Bordeaux , Aquitaine / France - 11 25 2019 : Gant sign store luxury shop in street boutique

Read more…

Market research consulting services

As a market research consultancy company, we offer a wide range of services to aid businesses with data analysis and strategy.

By partnering cutting-edge data analysis techniques with our team of market research consultancy experts, we empower leading brands to drive profits, growth and sales:

1. Brand Tracking

Our brand tracking identifies what your target market is looking for from your core products, services and processes.

The continuous tracking of customer sentiment through qualitative data puts your brand into context. This data is then used to harness your strengths – and remediate your weak points – to ensure you stay one step ahead of the competition.

2. Marketing Mix Modelling

We continuously evaluate and optimise your media investments, capitalising on areas where your competitors fall short and making the most of your marketing mix modelling.

Ensure you outperform your competitors and don’t miss a chance to increase the ROI of your media activities with the implementation of a clear marketing mix model.

3. Customer Experience

Improve your customer relationships and maximise sales by optimising your customer experience. Uncover gaps that your business can build on to boost CX.

By finding new opportunities through the use of qualitative data, we make new suggestions for your marketing strategy. This allows your business to create positive customer experiences and improve your brand perception.

4. Paths to Purchase

Using our paths to purchase solution, we analyse each of your key online and offline touchpoints. This brings you and your customers together to encourage brand growth along your paths to purchase.

By improving your path to purchase touchpoints and brand reputation, you’ll drive both sales and profitability through a data-driven understanding of the moments that matter in your customer journey.

5. Innovation Acceleration

We establish priorities based on data through our innovation acceleration and market research consulting services. This is to identify key areas of improvement, which are based on current successful marketing strategies.

Blog Posts

Why a recession is a good time to ramp up marketing

October 10, 2019

Robert Beatus

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After a record 10-years plus of economic growth, the U.S. and other parts of the developed world are starting to worry about recession. If history is any guide, many retailers and CPGs will take a close look at their marketing spend as a potential source of savings should growth falter. In doing so, they may be missing an opportunity to invest for the long term and to build market share.

Companies have typically reacted in two ways to a slowdown: they cut costs across the board, including marketing, and they seek to optimize the remaining marketing spend, focusing on activation and ignoring brand. This is short sighted. Brand is a key determinant in the path to purchase, while brand loyalty is expensive and time-consuming to build, but easy to squander. As an article in the Harvard Business Review (HBR – How to Market in a Downturn) put it, “Building and maintaining strong brands—ones that customers recognize and trust—remains one of the best ways to reduce business risk.”

READ ALSO: Power-up your Marketing Mix with brand expertise and data science

There are other advantages to continuing to maintain marketing spend during a slowdown. Competitors may cut back, allowing others to capture a larger share of voice. As demand for advertising space declines, media pricing becomes more favorable to the buyer, meaning you get more impact for the same amount of money, or the same amount of impact for less money. In short, there’s a chance to capture market share.

We know of one consumer retailer that decided to cut its media budget by about 15% and to reallocate significant parts of the remaining budget from brand building to activation. The idea was to invest more in price promotion, drive short-term sales, and cut costs. (The decision was not based on media or sales modeling optimizations.) The result was a drop in sales of almost 10% the following year and even more damage to the brand. Later analysis showed that media investment had contributed about 20% of sales and that investments in traditional brand building channels had been an important part of the program’s overall effectiveness.

In that same Harvard Business Review article, the author wrote that, “marketers may forget that rising sales aren’t caused by clever advertising and appealing products alone. Purchases depend on consumers’ having disposable income, feeling confident about their future, trusting in business and the economy, and embracing lifestyles and values that encourage consumption.” All these are challenged during a slowdown – making brand a more important factor in whether a customer stays with your product or finds an alternative.

“CMOs across the board are seeing shrinking budgets and increasing expectations. And with that, demand for more transparency around how their marketing investments are performing and effecting their long-term brand is more important than ever,” says Robert Beatus, Head of Research Design at Nepa. “Understanding today’s complex shoppers requires sophisticated analytical techniques like Marketing Mix Modeling (MMM), Attribution Modelling and other emerging marketing analytics.”

READ ALSO: What is brand tracking and why is it important?

One of the most promising analytical methods to recently develop is the space of Path-to-Purchase (P2P) analytics. It helps marketers measure changes to shopper psychology, as priorities are reassessed and new behavior patterns emerge, based on the touchpoints and combinations of touchpoints they experience on the way to buying a product or service. In a recession, shoppers are more open to switching brands or retailers, and P2P can help identify the reasons for that switch. As it does so, it simultaneously improves the ability to invest in the touchpoints that increase conversion, always an important function, but even more important during a slowdown.

On the corporate balance sheet, marketing is often treated as an expense rather than as an investment. In practice, it is an investment in the future growth of the company. Investing in marketing during a recession may allow a retailer or CPG company to expand market share, attract new consumers, and position its products for faster growth when the recession ends.