It seems difficult to place a number on a brand, especially when you have a small business. It can be hard to describe the value that your brand brings to your company. However, being able to state the value of your brand is an important business tool.
Knowing your brand’s value
can help you to articulate your competitive advantage, convince lenders of your worth and make for a stronger case in a merger or sale. If you want to know the value of your brand, you’ll need to consider what you will do with the information before selecting a method.
Because brand value is not an objective figure, there are different ways you can arrive at a value. The valuations of the major brands listed above are not exact numbers, and their actual brand worth is impossible to define. Still, the estimate is helpful as a measure of your brand’s power.
Below are three methods for calculating the value of your brand.
Cost-based brand valuation method
The cost-based brand valuation method takes into account of money
invested in the brand
since it launched. This includes the costs of advertising, promotion, marketing, campaign creation, licensing and trademarks.
To determine the cost-based value of your brand, simply add all of the expenses related to building the brand. Then, restate that figure as the value of your brand.
While this is an efficient way to calculate your brand value, it leaves out many factors. Public opinion about your brand or changes in your industry could help or hurt your brand valuation.
Market-based brand valuation
A market-based brand valuation relies on data from similar brands to help you determine your brand’s value. You can use data from a specific brand’s sell price, comparable company transactions or current stock market quotes. The more data you have, the better you can find an accurate price for your brand’s market value.
The market-based brand value sets the amount for which your brand could be sold, or what your market transaction price would be.
Income-based brand valuation
Sometimes referred to as the “in-use” approach, this method values a brand based on its potential income earnings. You would estimate future net earnings as they directly relate to the brand to determine the brand’s current value.
In this method, the brand value is the equivalent of the value of actual or hypothetical income, cash flow or cost savings due to the brand’s reputation
Your brand’s value is directly tied to how effectively you work to build your brand. One of the most important tools you can use to
promote your brand to your audience is video. Video helps you to introduce your brand and build trust with your audience.
If you’re wondering how video can help you to increase your brand’s value, Spin Creative can help. Say
hello!
About Us
Spin Creative is a video production company and creative agency helping marketers create winning video and creative strategies that engage, inspire and activate targeted audiences. Spin is headquartered in Seattle with offices in San Francisco and London, serving brands around the globe.
