measuring and valuing your brand
bravo has been developed by people who understand business, finance, marketing and accounting. Our extensive experience, research and knowledge has resulted in a clearly defined three-stage model which can be outlined as follows:
stage one – market research
In the first of three stages, a representative sample of the business’ clients (and, where appropriate, former clients) is surveyed to capture their perceptions of the brand, expectations of the brand, and experiences of the brand. Participants in this research are asked questions relating to the most appropriate key areas of brand performance identified from:
| (A) Knowledge: awareness of the brand and an understanding of what it represents (B) Quality: perceived quality of the brand and positive distinctive attributes (C) Loyalty: the willingness with which clients continue to use the service provider (D) Leadership: the extent to which the brand is seen as superior to its competitors (E) Differentiation: the substitutability of the brand and how it differs from competitors |
Responses to each question are given a score, and each of the five areas of brand performance is given a weighting according to its significance. The responses to all the questions are processed and result in a value for brand strength.
stage two – derivation of brand multiples
This stage has two components. Firstly, research is conducted into historical and current P/E ratios of similar companies, and of recent multiples paid for acquisitions. This information allows a sector-specific curve to be plotted which, when given brand strength, indicates the brand multiple for the product or service in question.
Secondly, this brand multiple is adjusted to account for the level of brand differentiation – a recognition that the differentiation of competing brands is a dynamic process and that businesses can generate revenue even though they have no discernible brand value. For example, the market’s perception of the competitive strength of a brand will vary over time.
stage three – profit performance
The business’ profits for the last representative period (usually 3, 4 or 5 years) are adjusted for inflation and are weighted according to how recent they are, producing an average profit figure. This is multiplied by the brand multiple to give a brand value. This process is repeated for each brand the company uses or, in the case of a monolithic brand, for each distinctive sector a business operates in. The unadjusted brand value will be the sum of these individual brands, or SBUs’ use of the brand.
For further insight into how this model would apply to your brand(s) please call us on 020 7317 2770 or email info@valueyourbrand.com to set up a meeting now.
