What Is Brand Value?
Brand value can be a company's most valuable asset, but too many companies don't prioritize building brand value as part of their strategic imperatives. In my new series for AYTM, Building Brand Value, you'll learn what brand value is, how to develop it, and why it matters. Think of it this way -- would Apple agree that prioritizing brand value is not important? Would Disney? Your company should give building brand value the investment it deserves, and you'll reap the long-term rewards that brand value and brand equity can deliver.
Brand Value Defined
Martin Bishop, Director of Brand Strategy for Landor offers the definition of brand value from C.W. Park, professor of marketing at USC Marshall School of Business, as starting point to understanding what brand value is.
His definition says that brand value is:
"The difference between customers' willingness to hear the costs to obtain the brand's benefits and the firm's costs expended to create those benefits."As with most things in life, a customer's willingness to purchase a brand depends on tangible features and intangible benefits. Stay tuned for Part 2 of the Building Brand Value series where I'll discuss features and benefits as they relate to brand value in more detail. For now, consider the various elements that contribute to consumers' brand valuation process, much of which happens subconsciously.
The Roots of Brand Value
At the highest level, brand value comes from consumers' physical and psychological perceptions. These perceptions are derived from the knowledge consumers have about the brand and alternatives to that brand. Consumers weigh price, differentiators, benefits, and features when they evaluate a brand. This evaluation leads to brand perceptions and specific brand expectations.
Companies that invest in ensuring those brand perceptions and expectations are marketable, accurate, and sustainable are far more likely to enjoy long-term growth than brands that focus on short-term tactics by treating consumer needs' symptoms but don't offer a cure for those needs.
Ultimately, the associated cost vs. benefits evaluation that consumers do in their minds or on paper is highly emotional. It could be argued that the classic 80-20 rule of marketing applies to brand value assessment, too, where 80% of the brand valuation is emotional (i.e., the brand makes consumers feel a certain, desired way) and just 20% is physical (i.e., the brand does what consumers expect it to do).Brand value is highly personal and each consumer is likely to value your brand a bit differently. However, one thing remains constant across the consumer audience -- brand value increases with brand loyalty and brand loyalty leads to brand advocacy and brand growth. The strongest brands understand how inter-connected all of these various branding metrics and milestones truly are. Branding is a 360-degree, continual cycle that never stops, but as brands like Disney and Apple demonstrate, the effort is worth every penny and every second.
Building Brand Value the Disney Way
What makes Disney able to retain and grow brand value year after year? It's simple. Disney knows its audience. The company delivers branded content and experiences through multiple touch points, but that content and those experiences are offered in a personalized manner to appeal to a highly segmented audience. Brand quality and consistency is paramount, and the customer experience is always first-rate. Loyal Disney brand advocates can trust that Disney will continue to meet their needs and expectations again and again.
That customer-centric focus should be at the heart of every brand. After all, consumers build brands, not companies.
Up next in the Building Brand Value series, I'll dive into more details about brand features and benefits and how to use both to build brand value the right way. Stay tuned to the AYTM blog so you don't miss Part 2!