Brand Core · Brand Value · Module
Valuation
What the brand is worth financially, on a stated method, with the assumptions visible — because the number is entirely a function of them.
The idea
How it works
Brand valuations vary by multiples depending on method and assumptions, which means an undisclosed number is not information. The recognised standards require the method and inputs to be published alongside the figure for exactly this reason.
Price premium is the least arguable evidence: what customers pay for the same thing with the brand on it. It underestimates total brand value and it is a fact rather than a model.
Working with it
In practice
- 01
State the method with the number
A valuation without its method and assumptions cannot be compared with anything, including last year’s.
- 02
Start with price premium
It is directly measurable and it is the component a sceptical audience will accept.
- 03
Value it when there is a decision
Sale, licensing, investment or impairment. Valuing annually with no decision attached produces a number nobody uses.
- 04
Keep it out of management reporting
The behavioural measures move year to year and can be acted on. The valuation cannot.
One level in
The components of valuation
A component is something that exists afterwards which did not exist before — a deliverable or a mechanism, not an intention.
A valuation without its method and assumptions cannot be compared with anything, including last year’s.
The other modules in brand value
Awareness
Whether the brand is known, and whether it comes to mind at the moment a choice is being made — which is the harder and more useful question.
LearnAssociations
What comes to mind with the brand, how strongly, how favourably and how uniquely — the part of brand value that does the actual work.
LearnLoyalty
Whether people come back, and whether they would defend the choice if a cheaper option appeared — behaviour and attitude, measured separately because they diverge.
Learn