Putting The Brand In Brand Valuation
Kelly Mackenzie, Creative Director and Founder of White Bear Studio, with guest Simon Haigh of Brand Finance, hosted a masterclass on the interaction between branding and company valuations in ‘Putting The Brand In Brand Valuation’.
Our Partner, David Endersen, shares some of the key takeaways from the session…
A financial strategy may not sound super sexy but this compact masterclass spiced up the essentials for business owners, leaders and brand managers looking to scale.
The session focused on both White Bear’s and Brand Finance’s proven methodologies to nail your branding and marketing strategies to drive sustainable growth and financial performance.
1. How to build your brand story and tone of voice.
2. How to build a brand for future growth and investment.
3. How your brand equity impacts your financial performance and how to use it to outgrow the market.
4. How to find your optimal marketing budget for growth.
Kelly and Simon discussed the link between brand and finance:
1. A Strong brand = higher profits and lower risk. Higher profits as you can command premium prices, lower risk as you reduce churn via stronger brand loyalty.
2. Simon explained the Brand Finance methodology underpinning how Brand Equity impacts a businesses value, and stressed how a strong brand impacts value across four pillars:
Customer: Brand perceptions affect price, volume, repeat, share of wallet, cross sell.
External Audiences: Brand perceptions affect distribution terms, channel access, strategic alliances, deal completion.
Staff: Brand perceptions affect recruitment, retention, morale, staff costs.
Financial Audiences: Brand perceptions affect share price, risk appetite, cost of capital.
3. This is borne out by the data which shows that Strong Brands drive superior returns. The Top 10 Brand Finance brands grew by 126% vs S&P 75% over a ten year period from 2008-2018.
4. For every £1 invested in design, expect to receive a £2.25 return on investment.
The Top 10 Brand Finance brands grew by 126% vs S&P 75% over a ten year period from 2008-2018.
Understanding the value of a strong brand and brand equity is critical for business owners, leaders, agencies, brand and marketing managers. As consumers ourselves, we all intuitively enjoy and ‘get’ nice brands, but it can be more difficult to understand tangibly what difference a strong brand can make to our financials, both from a valuation and trading perspective.
Clearly brand building and investment are important and pay. Optimise your budget between brand building and activation (marketing) to be cognizant of this. There is little point marketing a forgettable brand!
You can find out more about building a successful brand here.