True Brand Value Is Perceived

On Monday, Millward Brown released its BrandZ Ranking of the world’s Top 100 Most Powerful Brands. Besides the odd name, I have some issues with their methodology (found on page three of their release). It was thorough, to say the least, with claims of 1 million consumers interviewed about 50,000 global brands. But in the end, they still take some leaps of faith with respect to the values they assess.

Which means that the true value of any brand is perceived not real. Just witness the standoff between Microsoft and Yahoo! While this has been a bit of a public spectacle, it is not unique. It happens all the time when an acquisition is afoot.

Why? Because you can’t put a hard number to it. You can put a value to inventory, property, equipment and the like. When it comes to intangible assets, like a brand or associated patents, coming up with a dollar figure can be anyone’s guess. That’s why it all gets buried in what is called “goodwill”. It is that amount above all of the tangible assets that constitutes the total value.

But there are other ways to consider your brand’s value, even if you have no plans to sell.

  • What does the brand mean to your business? Does it allow other parts of the business to thrive that wouldn’t otherwise? Or does it inhibit growth?
  • What does it mean to you personally? Your brand may contribute significantly to your desired lifestyle, especially if you are a small business owner.
  • What trade-offs do you have to make with respect to your brand?

Based on how your brand supports what you do and how you do it, you can assess a rough value of what you would be willing to sell it for. Then, establish a range of values that represents the price you would like to get, intend to get and must get. If a suitor comes along and offers you a price within that range, you’ll be ready to sell or negotiate a better price. If that same suitor offers a price below your must, then hold on until the right offer comes along.

Remember, this brand value is in addition to the value of any physical assets you own.

The better job you do at managing your brand, the more value you create.

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