I’ve been reading a lot about brand value recently. Brand value can have multiple definitions, but one way to think of it which I found helpful comes from Faris Yakob:
“A brand is a collective perception in minds of consumers,” kinda like money he continues… “Money is only money because we all agree that it is. Its status as money is not in any way derived from the physical qualities of the coin or note and it’s no longer linked to a gold standard.” And he ultimately makes the point: “a brand is a form of socially constructed reality that has obtained an objective reality, which is why it can have a cash value that is dependent upon the totality of perceptions held about it.
Interbrand has made a business upon the ability to quantify brand value and defintes it as something along the lines of “the percent of each consumer transaction which can be attributed to the brand.” So how is brand value created? Jez Frampton, Interbrand’s CEO explains it in this peice called The Red Thread:
The Red Thread is a concept woven through many cultures…The idea of a bright, illuminating thread that runs through everything, from the smallest fragment to the whole, is powerful and captivating. In our world, this is a wonderfully rich and simple metaphor for brand value.
The brands at the very top of our Best Global Brands ranking understand the reality behind this metaphor. For them, the notion of value runs like a red thread through their brands, driving demand throughout every aspect of their business.
So start with an idea or mission that makes people’s lives better, grow your brand in the image of your ideals and reap the benefit that the brand creates. The Red Thread here is the brand’s integrity which should serve as a litmus test against which all decisions can be measured.
A new take on the brand value conversation comes from The Brand Bubble and the BrandAsset Valuator people at Y&R (who happen to be competitiors of ours at H&P). They see a fundmental error in today’s brand value equation:
We’ve identified a growing divergence between brand valuation and brand speculation. Our data indicates that investors are irrationally overvaluing brands, and that if leading companies don’t take steps to change their approach, more than a few of them might soon experience dramatic declines in market value.
So where has their brand value gone?
Most of the brands lining our supermarket shelves, hanging from department store racks, or touting their superiority on television are experiencing a rapid diminution of perceived value. Consumers are simply falling out of love with a majority of brands they buy.
And how does one restore this value in the eyes of consumers? According to the Y&R folks, the answer is maintaining something they call Brand Energy (something we talk a lot about at H&P, though we call it Salience). Gareth, expands on this idea:
They go on to argue that the exceptional brands that are valued by consumers have a common trait. They are seen as having energy and momentum. That’s a powerful conclusion as it challenges a lot of the assumptions that underpin brand management, marketing and communications. It argues that consistency is a false idol; change, momentum and energy matter more. (for more watch this video)
This dovetails with Seth’s Purple Cow lesson that ‘the riskiest thing a successful brand can do is to do nothing.’ This idea is punctuated by one of my favorite Eggers quotes:
“Stasis is itself criminal for those with the means to move”
So the takeaway from all of this? To continue succeeding today, brands need to believe in their vision of how they’re making peoples lives better and they must evolve their offerings as their consumer’s needs themselves are changing. All this while maintaining the essence (or red thread) that got them there in the first place.
