Companies spend millions of dollars to generate awareness for their products and market their brands — and what they reap from these expenditures can make or break them.
Brand management is more than the products or services that you sell. It's what you stand for — remember, your company logo, products, website, or marketing campaigns may change with time, but your brand value must always remain the same.
Consumers are constantly looking to forge emotional connections with brands, hence, it’s important for companies to offer consumers something that they can relate to.
This goes beyond an attractive website or a beautiful logo. Although the external elements of your brand like your name and your voice can help to create brand awareness, it's your brand value that will deliver real engagement and help you create powerful bonds with your target audience.
In this article, we will be discussing brand value in depth. We will also be sharing what 8 successful brand managers had to say about the importance of brand value.
What is Brand Value?
Rani Cohen, Chief Marketing Officer, Australian Family Lawyers, defines brand value as follows:
"Brand value is the ‘perceived value’, and how often people will choose one brand over alternatives. Brand value is important because when people perceive that a brand is distinct and aligns with their personal values, it’s a really powerful competitive advantage."
So, brand value refers to the worth of a brand to the consumer. It's a subject of much debate in the world of marketing, and there are two schools of thought about its definition:
Financial worth: This is the monetary value assigned to a brand. Perceived worth: The worth that consumers perceive your brand.
Let’s have a look at both.
Financial worth denotes the market value of a brand. It can be calculated based on current and future sales, as well as the potential for future growth. For example, the financial brand value of Coca-Cola is around $78 billion.
On the other hand, perceived worth denotes how important consumers feel your brand is to their life, social status, or job. For example, both Coca-Cola and Pepsi are both soda companies, but many soda drinkers perceive Coca-Cola to have a higher brand value than Pepsi.
When consumers find value in a brand, they can develop loyalty towards it — and this can discourage other companies from joining the market and protect the market share of an existing company. For example, a diaper brand like Pampers is well-known in the market. Other companies may opt for other product lines outside of diapers to avoid competing with well-known companies, which may be detrimental to their bottom line.
If the term brand value makes you think of dollars and cents, you’re partly correct.
When customers know and love your brand, they are willing to pay more. This is known as brand equity. In other words, brand equity is the price above a product’s market value that consumers are willing to pay.
Brand equity and brand value are linked, but strictly speaking, they are not the same thing.
Why Is Brand Value Important?
Let’s imagine you’re negotiating the acquisition or merger of a major brand.
If you were taking over Coca-Cola, you would be buying a lot more than the recipe for a caffeinated, sugary drink. You would be benefiting from the name, logo, and other brand elements that consumers instantly recognize and trust.
Brand value is a fairly modern phenomenon. In the past, consumers relied on product quality and value to make purchasing decisions. However, the advertising boom of the 1960s turned certain businesses into household brand names.
With the emergence of modern marketing, companies could choose to associate themselves with positive characteristics such as style, elegance, trustworthiness, security, and innovation. This is essentially what it means to build a brand — a key element of any marketing strategy today.
Pretty much everyone agrees a strong brand is valuable — the tricky part is putting a number on that value.
How Is Brand Value Calculated?
Your brand is a valuable asset. With other assets in life, such as your house or your car, you can easily do some research and figure out the going rate.
Calculating the value of a brand — also called brand valuation — however, is more complex.
We consider a brand’s value to be a measurable concept encompassing the total net worth of a brand.
Key factors include:
Brand Recognition: have consumers heard of your brand?
Brand Image: how do consumers perceive your brand?
Brand Understanding: do consumers truly understand what is it your brand offers?
Brand Consideration: do consumers consider purchasing from your brand over the competition?
Brand Loyalty: do customers stick with you over the competition?
One simple way to gain insight into your brand value is to send surveys to your customers, as direct customer feedback will show you how people perceive your brand.
With brand monitoring software, you can accurately measure your brand awareness and track levels of recognition, popularity, and customer loyalty among specific relevant audience segmentations. This helps you make better-informed decisions related to your brand.
If you are spending your time and budget on brand marketing campaigns, it's vital to measure the impact of what you are doing.
After all, just like an IT manager or accountant can easily point to cost reductions in technology systems or show increased profitability, modern brand managers need to be able to show how their brand has increased or decreased in value over time.
What Makes A Brand Valuable?
Valuable brands have a few things in common. A brand is considered valuable if it’s:
Highly recognizable: this means people know who they are
Positively perceived: consumers have a good view of them
Popular: people actually buy and use the products or services
Have a loyal following: customers are ambassadors of the brand
According to Glen Bhimani, the CEO and founder of BPS Security, having a valuable brand is essential to the growth and prosperity of any growing company. He explains:
"Brand value is extremely important because it dictates how much you can charge for your service or product. People expect certain prices from different kinds of brands, and the more widely known your up-scale brand is, the more you are able to charge.
"If you haven't built up your brand value yet, start by getting some marketing expert consultation on your current brand. The more of a cohesive brand you have, the greater your brand value so it's important to have a cohesive brand across all your marketing assets."
As we can see, brand value not only allows you to reel in new customers but also impacts how much you can charge for your products and services. The higher the perceived value of your brand — both its tangible and intangible assets — the more likely it is you'll be able to charge higher price points.
6 Tips to Help Build Brand Value in 2022
According to Walter Landor of Landor & Fitch, "products are manufactured in the factory, but brands are created in the mind."
It may be easy to calculate the physical value of your products, but it’s consumer perception that will determine the value your brand has in the marketplace. This means that it’s important for you to build value into your brand and communicate that value to your customers.
The following are some of the ways through which you can build or achieve brand value:
1. Improve the Consumer Experience
Amazon is the leading brand in the world, with a value of $415.8 billion. But, how did it get there?It worked on its user experience.
Amazon is well-known for providing a great brand experience. Consumers love the speed and convenience of buying books, gadgets, and other items on its site.
The point is, make it easy for customers to buy from you. If customers are not impressed when interacting with your brand or if the process of making purchases is too complex to follow, then there will be no reason for them to remain loyal to your brand.
So, you should take a look at your platforms and processes. Is it easy to use and navigate through your website? Is it mobile responsive? Is your customer service team effective?
If you work on the above areas and others, you will improve your user experience and build your brand value.
2. Understand your Target Audience
If you need to build a strong brand, you MUST understand your customers and appeal to their needs. This means that you should create original and creative ads that go beyond products and features and tap into customer emotions.
Apple, one of the top brands in the world, discovered this trick and employed it in its marketing campaigns. When the brand launched the iPod, it used the tagline, “1000 songs in your pocket”. It didn’t focus on product features or technical specs.
Apple has shown that it truly understands its customers. The brand designs sleek and easy-to-use products that have a value far beyond their technical quality.
Understanding who your customers are and meeting their needs is ideal for building brand value. This will give you ideas about what you should say to them.
Building brand value also requires finding a group of people who actually care about what you are saying. You should target people who will find your brand and products valuable, instead of casting a wide net. So, you must know the channel where your target audience is and customize your brand message for that channel.
3. Be Unique
You must put in effort for your brand to stand out, which may mean breaking free from your comfort zone.
Be willing to challenge the current standards of the market and go where your competitors can’t — or won’t. Having a unique brand identity will help you to distinguish yourself from your competitors. But how can you remain unique?
The answer is simple. By sticking to the core values of your company.
4. Work from the Inside Out
To build your brand value, you must employ a technique called "remarkable marketing". It's the art of building things that are worth noticing into your product or service.
For example, nobody will be amazed by a brown cow, as the world is full of brown cows. So, how can you stand out from the herd? By being the purple cow.
To build a strong brand value, focus on superlatives. The happiest employees, the most innovative, the best customer service, etc.
5. Keep your Tone of Voice (ToV) Consistent
Brand consistency is very key in building brand value. The more often you present the personality of your organization to prospective buyers, the more likely it is they'll remember you.
If you use the same tone, language, and syntax in your output, you'll do away with confusion and allow your audience to establish easy associations with your content.
Create a formal set of ToV guidelines to guide the creation of future content and ensure that your blogs, emails, and social posts all speak with one voice.
6. Use High Standards for Design
Design is essential for visual communication. How you use shapes, colors, and fonts or lay out elements on your website, product package, or email campaign will determine whether your brand is perceived as valuable or not.
The way you package your brand will determine how it is perceived and interpreted. Your company may be small but a “strong visual branding system” can make it seem more powerful or create the impression of a large company’s strength on consumers.
On the other hand, if you use a bad design, you will destroy your brand value.
Expert Advice on Building Brand Value from Successful Marketers
According to Drew Sherman of RPM, "brand value lies in how well the brand connects with its customers philosophically. When many people can connect with a brand, not just in terms of what it offers but what its mission represents on a human level, this makes the brand more valuable."
We couldn't agree more — so let's see what other experts say on how you can make a brand valuable in 2022.
1. Harry Morton, Founder of Lower Street
"Create an impeccable customer experience. No matter how you choose to look at it, the fact remains that customer satisfaction is what drives a brand towards success. If your customers love what you do and how you do it, they aren't going to look anywhere else.
"Putting this customer-centric approach into action involves creating a smooth experience for your users at every part of the funnel and offering continued guidance and support to them.
"From lending an ear to resolve unexpected challenges to making your website incredibly user-friendly, you really need to evaluate every single customer touch point and refine it so that it not only makes the lives of your audience easier but also inspires joy in every interaction they have with you."
2. Katt Srinivasan, Co-Founder of SneakQik
"Besides how much the brand is worth on the paper, brand value to me is what you first buy into a brand in your mind before you actually buy from the brand - as you don't buy from a brand you don't value. It's the impression, perception and belief the brand is able to create in your mind, about what the brand stands for.
"Try to recall any brand you can. What comes to the mind immediately? Whatever you can think of will ultimately influence your behavior towards it, which says a lot about the brand value. This perceived brand value inherently stays in you and either grows or diminishes in you, based on what the brand is worth according to you.
"The stronger the value of a brand, the stronger the notion it imprints on you (or consumers), which consequently determines the brand's bottom line. Brand value is what establishes your affinity and liking for the brand.
"To build value, brands have to focus on the customers' wants and needs. And it really depends on what niche the brand is targeting. It varies from one industry to the other. Brands have to first define that. And COVID has also changed the way brands are built. One of the things I think the brands will particularly need to look at post-COVID is addressing environmental sustainability that today's consumers care about."
3. Shelley Grieshop, Creative Writer & PR Manager at Totally Promotional
"Brand value is the sum of all the unique things about a company that helps others gauge its worth and potential.
"Brand value is important because it can set a business apart from another in the same industry. It should be used to guide decisions in the company's best interest. Just like brand culture, every employee should be aware of a company's brand value to keep actions, content and behaviors consistent. This shows a company's stability and authority over time.
"In 2022 and beyond, companies can build brand value by keeping their message consistent about who they are and what goals they strive to achieve. This can be accomplished by the tone used in all communications, especially marketing campaigns. Each company should create a 'brand voice' - a portfolio, if you will, of its identity - and share it with staff members. This ensures everyone is on the same page when representing the company in person, on social media or any other methods of communication."
4. Emily Goodwin, Digital Marketing Coordinator at Neon Supply
"Brand value centres on recognition, and that's a long game. Creating a cohesive, recognizable brand takes consistency in how you implement your creative assets. To do that, brands need to have a thorough understanding of their business goals and how to communicate that to the consumer. Too often, the brand doesn't speak to the customer, which hampers its ability to create consistent experiences and cultivate customer loyalty.
"Building your brand's value can be done by using your brand to tell stories that can connect with customers or stakeholders. Use your mission and values to align your brand with your audience's emotions.
"Brands also need to ensure they target specific demographics or subsegments of their target market to find ways to align their brand values and stories with various customer segments. Brands no longer have to be stagnant. They can evolve to align with social or political issues while ensuring they achieve a wider array of marketing objectives."
5. Hamna Amjad, Outreach Manager at Physicians Thrive
"Brand values represent the unique personality of your brand and help in distinguishing your brand from your competitors.
"Your brand values lie at the core of its existence. So knowing it yourself and explaining it to your customers is imperative if you want your business to be successful. You must clearly define why you do what you do and how it helps people or solves certain problems in society. This should be the very foundation of your company and the center of your brand’s vision. All your business decisions should be based on that.
"Your brand values control how your customers perceive your brand. With so many brands available in the market, it’s hard to get your consumers’ attention. They no longer gravitate towards just any brand, even if it provides good services or products. They prefer brands that reflect their values and beliefs. You can create a powerful bond with your customers by attracting the right audience that resonates with you."
6. Jodi Duncan, Founder of Fletch & Co.
"A big part of what I do with my clients, is helping them move from an old school business model of just profit and growth to a conscious brand business model that includes purpose, culture, community, and social and environmental impact. This is where the value of brand growth sits in today's world, as we are seeing an increase in conscious buyers and people becoming more aware of how brands are operating to impact the world.
"When you build a brand that consumers can connect with, relate to and get behind and support; this is where the value increases and differentiates you from others in the same field / industry.
"This would be my biggest tip for any brand looking to grow in 2022 - stand for something, actually act on it, relate to your consumers, evoke their emotions AND include your team in the process; so they feel valued, respected and trusted (after all, they are your biggest brand ambassadors)."
7. Sera Chern, Marketing Director of Virtudesk
“Brand value is the worth of your brand in your industry, especially in the eyes of your audience. This also determines how you’ll make a business from the products/services you provide. Your audience should know that your brand exists.
Establishing why your brand is important and being recognized by the general public attracts potential customers, and drives sales for your business. Thus, it is very important to work on your brand visibility, brand logo, tone, and voice, so your brand can be recognizable from your competitors.
"My number one tip in building your brand this 2022 is to focus on increasing your online visibility, especially on social media platforms and search engines such as Google. A lot of studies revealed an increase in their usage today, and you’ll be missing out on a great opportunity if you are not doing this. Work on your SEO ranking so you’ll get more chances of being seen by your audience.
"Lastly, provide value to your audience through content creation. They will not be interested in your brand if you are not solving any of their problems.”
Brand value is made up of far more than just the products or services a company sells — it's what the company itself stands for. Brand value helps companies build strong bonds with their target audiences, and it's the reason why consumers may prefer Coca-Cola over Pepsi, Mercedes Benz over Nissan, etc.
For a company to build or achieve brand value, it must first improve its user experience. This means making sure that all interactions between their brand and customers are as easy and enjoyable as possible. Big brands like Amazon discovered this trick long ago and made it easy for customers to shop on their websites — which has seen them get to where they are today.
Building brand value also requires a company to be unique, which may mean being willing to go where its competitors cannot or won’t. In the end, building brand value is the key to building a sustainable, successful brand in 2022 and beyond.
Updated by: Cory Schröder on 15.09.22