Measuring brand value is like understanding the hidden treasure of a company: it tells us how much a brand is really worth.
In our experience working with brands firsthand, we know that the value of a brand has a big impact on businesses as a whole. Companies that know their brand's value can make smarter decisions about how to grow their brands and how to talk to their customers.
However, measuring a brand's value isn't just about seeing how much money it brings in. It's about discovering the power of a brand's name and the impact it has on consumers. Brands with strong value can often charge more for their products, and bounce back faster if they hit a bump in the road.
In this post, we’ll discuss what brand value is, why it matters, and more.
What Is Brand Value?
This term refers to is worth to how much a brand is worth as a whole. When a brand has good value, it often sells more products and at higher prices.
Common aspects of brand value are the brand's name and reputation. How do people react when they hear the brand's name? Do they think of quality and trust?
These feelings are what make a brand stand out and attract new customers.
This information is critical for both business owners and customers, as understanding your brand's value can help you make better business choices. These choices can range from allocating more budget for marketing efforts to improving brand voice.
Why Measuring Brand Value Matters
In our work, we've learned that measuring brand value is vital.
It's like putting a magnifying glass on how the world sees a business; brands that measure their value know if they're winning hearts or if they need a fresh approach.
Here's the scoop on why it's a game-changer:
Stay on top: Companies stay ahead of the competition when they know their brand's worth. It's not just about money—it's about people choosing one brand over another.
Better business decisions: We know that smart measurements lead to smarter decisions. When brands find out that their value was not what they thought it was, it helps them pivot in their marketing, business, and messaging strategy. We help brands do this by providing the highest quality data they need to succeed and make the right calls (with the right data).
Spotting trends: Lastly, when brands keep an eye on their value, they spot trends before they blow up. It's like having a sneak peek at the future. This way, they can ride the wave of what's popular or fix things before they sink.
Recommended Reading: What is Data-Driven Decision Making? (And Why It's So Important)
When we measure brand value, we're looking at the overall market worth of a brand.
Brand equity is different, on the other hand. It's all about what people think of a brand and how loyal they are to it. “Good” brand equity generally means that customers have positive feelings and beliefs about the brand.
Brand equity isn't as easy to put a number on as brand value, but it’s still very important.
A brand with strong equity often has a higher value because people's positive views can lead to more sales and loyal customers. We've noticed brands with high equity can even charge more for their products.
Let's share an example…
Think about a famous soda brand. Its logo and red can are known all over the world. That recognition is a part of its brand equity. If you hear the soda’s name and think of good times, that’s also equity at work.
All those good feelings can lead to more sales, and that's when brand value begins to increase.
How We Help Brands Measure Value
At Drive Research, we understand the importance of measuring brand value. Our team assists brands by looking at their market performance and how their target audience views them.
One aspect of this that we emphasize is customer feelings and stories tied to the brand.
To obtain this data, we regularly conduct online surveys and focus groups. These research methods tell us a lot about the brand's strength in the market.
We've also learned that numbers can speak volumes, and will track both quantitative and qualitative data for brands. This shows not only how much people are talking about the brand, but also all the numbers behind it (such as sales).
Lastly, we compare the brand to others to see how they compare to industry rivals. This gives us hints about their price in the market, and other important information.
In the end, brands that stand out and connect with folks tend to be worth more.
Different Types of Measurements
Below, we’ll briefly discuss different ways we measure brand value. You’ll find that this can be done in a variety of ways, depending on the needs of a brand.
Income-Based Value
In our experience, calculating a brand's income-based value is about looking at the cash flow the brand generates. This is done by using current status to forecast future profits and calculating the present value.
We often help analyze the brand's ability to generate income by reviewing sales and profit margins over time. The idea is to estimate the earnings attributable solely to the brand (which is difficult but can be valuable) and not other factors.
Market-Based Value
When we turn to market-based value, it's a matter of looking at how much the brand would fetch on the current market.
This can include comparing the brand to similar ones that have been bought or sold recently. Sales, market share, and stock value can all paint a picture of market-based value. It gives an idea of what investors think the brand is worth.
Net Promoter Score (NPS) Value
Lastly, net promoter score (NPS) value, a customer loyalty metric we often use, gauges how likely customers are to recommend a brand to others.
A high NPS indicates a strong brand with devoted customers, which we've found can be linked to greater market value. Businesses keen on growth keep an eye on their NPS since it often signals customer satisfaction and repeat business potential.
Factors of Brand Value
Approaching brand value involves many different factors. These range from marketing outreach to community engagement levels to the customer journey.
Below, we’ll discuss each of these a bit more.
Marketing, Advertising, & Messaging
In our experience, successful marketing, advertising, and messaging significantly impact a brand's value. It's essential to craft messages that resonate with the audience and reflect the brand's promise.
For example, a campaign that aligns with a brand's values and reaches the target audience effectively can improve brand recall and increase customer loyalty over time.
This also helps consumers connect with a brand. For instance, 33% of brands use paid advertising strategies to connect with their base on a personal level.
Community Engagement
Community engagement is another critical factor that influences brand value. It's about creating a sense of belonging and an emotional connection with the brand.
We've noticed that brands that actively listen to their community, provide valuable contributions, and engage in meaningful conversations tend to garner positive sentiments, which helps boost the overall brand value.
An interesting fact that many don't know is that community-driven brands often see a rise in word-of-mouth referrals, which are incredibly valuable.
Customer Journey & Experience
The customer journey and experience are vital in shaping brand value, which brands can find out by doing market research.
Brands typically want to strive towards the point where the customer's interaction with the brand is smooth, enjoyable, and exceeds expectations every step of the way.
Tailoring the customer journey to individual needs can result in a positive impact on a brand's perceived value.
Contact Our Branding Market Company
Using our years of combined experience in the field, the Drive Research team can help you measure the brand value of your business. We’ll provide actionable insights based on our data to help move your business forward in the right direction.
Curious about the rest of our market research services? Let’s talk!
- Message us on our website
- Email us at [email protected]
- Call us at 888-725-DATA
- Text us at 315-303-2040
Austin Parker
Austin has an extensive background in SEO as he's been blogging since 16 years old back when the internet was in its infancy. As fitting, he holds a Bachelor's degree in English with a concentration in creative writing.
Learn more about Austin, here.
