Wednesday, May 25, 2011

Global Brand Value Studies - How do they help business leaders?

Brand is one of the most important assets a company "owns", broadly defined as the whole of customer sentiment towards your company.  Although easily defined, brand is hard to value and even harder to manage.  Interestingly, there seems to be more 3rd party insight available on the value of a brand than there is on the levers you can pull to impact that value; several companies put out annual brand value rankings.  These rankings have always been interesting, but unless you are involved with mergers and acquisitions and need the brand value to calculate intangible assets, the rankings have done little to help the line managers wondering, "what levers can I pull"?

Millward Brown, a WPP company, just came out with its brand value study, called "Brand Z".   Encouragingly, this year, they have begun to look at the levers a company can pull.  The methodology to calculate brand value still requires a firm grasp of finance, but Millward Brown broke down a couple metrics that actually begin to have relevance to leaders ... specifically, they look at a customer's engagement with a brand over time (called TrustR) and a willingness to pay metric (called Value-D).  These are business priorities around which there are real strategic conversations happening.  

The brand value rankings are still likely to be used as "score cards" ... how did my company do, what do I need to justify spend ex post facto, etc.  However, going beyond a single brand value is a step in the right direction of informing decision making and begins to move the study's relevance beyond just corporate bragging rights.  The study is worth a read.