How your brand adds value to your business

Do you understand how much your brand actually adds to the value of your business? If you’re looking to merge, sell or attract investors, it’s really important to know this.

It’s also helpful because you can make the right case for spending money on your brand because you know it adds to the bottom line. You can even factor this spend into the balance sheet and include it as a sizable chunk of your business’s intangible assets.

So how does it work then?

Firstly, we should look at some historical facts and figures. Large brands carry billions of dollars’ worth of value. For example, the Apple brand comes in at around 323 billion dollars with Amazon not far behind. Here are some more stats on UK brands.

Yes, these are eye-watering sums of money but even small businesses can carry strong brand value within their sector or local market. Some brands even command 40% of the purchase price when companies decide to sell.  Since this is where most of our businesses operate, brand equity is certainly something we should leverage in terms of growth.

It’s no surprise then that John Stuart, Chairman of Quaker, said: “If this business were to split up, I would give you the land and bricks and mortar. I would take the brands and trademarks and I would be far better off than you.”

And this was back in 1900! Think about the brand value of Quaker as it stands today. Now we’re starting to see the big picture, aren’t we?

Why we need to invest in our brands

Another fact backed up by research is that your brand is worth more when you invest in it. Every modern company that has driven above average profitable growth has invested heavily in their brand.

OK, enough of the facts, now let’s talk about how your brand adds value to your business.

Basically, there are three key things that affect your positioning in the marketplace. Valuable brands:

  • Are highly recognisable
  • Are positively perceived
  • Have loyal followers

Now let’s break this down to explain what we mean here.

We believe that a company is deemed to be highly recognisable if its:

  • Purpose and brand values are clear and people buy into them
  • Brand personality is evident through everything it does – from the way it speaks to customers to the way it shows integrity and humanity
  • Attributes are a key differentiator over other competitors
  • Brand story is believable and creates an emotional connection with people

But these are only some of the things we think are important. There are many, many more ways that your business is seen and heard.

Next then, what do we mean by positively perceived? These are our three main criteria:

  • Customers trust and rate your business highly and would recommend you to friends and family
  • Your business is seen as a force for good and gives back to its local community
  • Partners and suppliers are happy to work with you and support you

Lastly then, let’s discuss customer loyalty. We’re not just talking about people who follow your business on social media here. It’s about customers who endorse your products and services.

You need to engage, capture and measure feedback in order to build a loyal customer base. And you know if your customers are loyal if they’re:

  • Happy advocates of what you offer
  • Willing to pay a little more for your products/services
  • Giving you unsolicited positive feedback

Want to know more? Sign up for our monthly blog. Next time we’ll be talking about how to work out how much your brand is worth.

We also run Brand workshops, so please let us know if you’re interested in joining us. You can find details here.

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