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.
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
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 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.
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 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.
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.