The Three Faces of Brand Value
Social, Commercial and Cultural
I’ve been following Fast Company’s series on social currency, in which they propose that brand value is strongly impacted by social media. I agree with them, in that social media has become an important aspect of gauging and managing brand value. But remember that brand value builds over time, and just as any investor looks at longer term measures of their financial portfolios, so too should shareholders look at the longer term trends in brand equity. Companies should routinely measure all three faces of brand value: social, commercial and cultural.
Social value is suddenly a hot topic, when we see the devastation caused to Toyota, BP and Apple as they fight their respective crises of recalls, spills and product functionality. Crisis management has always been important but never to the extent required in today’s world. Bad news has always traveled faster than good, but news in the hands of today’s consumers is almost always coupled with personal opinion. Everyone’s expected to have an opinion, and then write about it online. (Yes, I see the irony of this post.)
Commercial measures are the traditional forms of equity measurement, in which study emphasizes the market’s propensity to buy, pay a premium for, articulate the brand’s promises and competitive differences, identify inalienable visual and verbal cues from the brand, and define their expectations of the brand going forward. While formal brand equity studies are most desirable (and should be conducted every couple of years), it’s possible to get a good picture of the brand’s health through a combination of other approaches: market segmentation, satisfaction studies, and competitive audits, to name a few.
Cultural measures articulate the success of the brand inside the brand’s organization. Can employees describe the brand? Do they know how to apply that knowledge in their actions and decision making? Are new products and services evaluated based on their ability to move the brand forward? Do executives know when it’s time to refresh, invest, or even abandon their brands? Brands are living things. They are born, grow up, grow old, and die. They’re also separate entities which should be managed and financially appraised. Sometimes they’re far more valuable than imagined. But, unless companies formally address brand value, they won’t know how to fully address their assets.