Tag: branding

You Can Measure Brand Value

I’ve written about the value of branding before and why it matters. One way to assess the value of a brand is measuring its consumer-based brand equity, or CBBE.

By definition, CBBE is the differential effect that brand knowledge has on consumer response to the marketing (specifically, the promotion) of that brand. The figure illustrates this differential effect.

CBBE-exampleLet’s say your competitor is Brand A and you are Brand B. Then, let’s say that you have very closely competing products, in terms of key functions and features that are important to customers.

Finally, let’s say you both spend approximately the same amount on promotion for your respective products, to educate and motivate customers to buy them.

All things being equal, the larger result of purchases of your product (Brand B) versus your competitor’s (Brand A) – as represented by the dollar signs “$$$” – is the measure of CBBE.

In short, you could say that your brand equity is the aggregate of that differential effect, on an annualized basis.

Or, in other words:

  • IF you run four major campaigns during the year,
  • AND sell an average of $250,000 more than your competitor each campaign,
  • AND spend roughly the same amount on promotion as they do,
  • AND use approximately the same techniques (i.e., couponing, PR, etc.),
  • THEN your CBBE is $1M or more, per year.

That’s one way that branding delivers value to your business.

Here’s another…

Brand value is a significant contributor to the intangible assets, specifically, what is known as goodwill, of a company.

When you look at a balance sheet, the major components include Assets, Liabilities, and what people refer to as Owner’s Equity. Assets include tangible assets (like cash, bonds, etc.) and intangible assets. Goodwill is a key intangible asset.

CBBE-balance sheet

In accounting terms, when a company is acquired, goodwill amounts to the excess of the “purchase consideration” (the money paid to purchase the asset or business) over the total value of the assets and liabilities. It is classified as an intangible asset on the balance sheet, since it can neither be seen nor touched.

Over the past several decades, intangible assets generally – and goodwill, specifically! – have represented an increasing percentage of acquisition costs…largely, many would say, due to the growing added value that effective branding represents to a firm.

In our rapidly evolving mobile/social/location-based digital economy, there are evermore services for helping companies increase their CBBE.


For example, new services like HYPR Brands and Narativ that provide access to large networks of brand ambassadors — who themselves are key influencers in specific categories — are becoming powerful allies to brand building.

For marketers, the key is to be committed to measuring your CBBE and be bold about arguing the business case for your brand-building programs, when it comes to budget allocation and strategic initiatives for the company.

You are the stewards for one of the most valuable assets and powerful tools that your company has in its quest to lead your market segment. Don’t forget that!

Super rapid awesome brands

Brands matter. Great brands make a positive difference in cost of sales and in overall company book value. You know that line on the balance sheet called goodwill? The somewhat ephemeral items that compose goodwill are often comprised of things like brand, high performing culture, and other soft items that make the company worth what it’s worth.

Social media, mass collaboration platforms, and other tools of the web 2.0 age have helped amplify brands, both for those that are going to market for the first time looking for ways to accelerate their entry, as well as established big brands that are looking to further reinforce and extend their positioning.

MS20The research team for nGenera’s Marketing & Sales 2.0 program recently completed a study and associated new report on Brand Communities. In the report, for which the research team studied over 100 online communities of big and small brands, there several notable frameworks and lists that provide unique insight on the subject of branded communities. These include:

  • The New Brand Arsenal – chart of 13 elements, comparing a decade ago to today
  • The six ways brand communities create value – advocacy, insight, content, support, perception, and serendipity
  • The FLIRT Model (Blueprint for success): Focus, Language, Incentives, Rules, and Tools
  • Implications for the Future of Marketing
  • The 50-question Readiness Assessment for building and operating a branded community

The process of creating an awesome brand isn’t just for companies with deep pockets. More than ever, one can be extremely efficient with capital, yet rapidly create and launch a brand that makes a powerful statement. One super resource I discovered earlier this year is Brandstack.

brandstack-croppedThe good folks at Brandstack came up with a way to reverse the brand creation process.   Frequently (always?) the entrepreneur must endure a maddeningly prolonged process that starts with their “big idea,” immediately followed by:

  • (a) thinking of a company name
  • (b) vetting it for availability
  • (c) checking for available URLs
  • (d) designing a logo and tagline
  • (e) creating a stationery system, including business cards, letterhead, envelopes or labels,
  • (f) designing the website, etc. etc.  

Brandstack reverses the process.  Designers from around the country (or globe), develop the brands first – including domain names, logos, template websites, and source rights to the IP – and put them up for sale in an open market for the would-be entrepreneur to browse. When the entrepreneur selects one, they can pay the suggested list price or make an offer. 

A clever way, indeed, to launch your very own super, rapid awesome brand.