Connecting Brands to Financial Performance
Brands are the connection between companies, products and their customers and communities. Brands consist of multiple assets, which include trademarks, names and logos as well as the websites, social media pages and other assets connecting the company with its community. Brand valuation connects you brand to financial performance.
From non-profits to Fortune 500 corporations and technology firms to family-owned enterprises, brands are a key intangible asset that contribute to financial performance. Further, strong brands provide financial and economic benefits to their owners and investing in brands can increase financial performance.
What is a Brand Valuation?
Brand valuation conveys different meanings for different audiences. The term Brand Valuation is often intertwined with terms like Brand Equity and Brand Contribution. From our financial and economic perspective, Brand valuation is the quantification of the contribution to financial performance made by a company’s brand assets. The company, or brand owner, can leverage these assets to improve its financial performance by a) selling more products; b) selling products at a higher price; or c) avoiding costs and expenses. A brand’s value is determined by calculating the present value of future economic benefits driven by the company’s brand assets.
The Nevium Approach to Brand Valuation
Nevium’s brand valuations analyze the factors that drive financial performance. We explain the interaction between brands and other intangible assets. Once the brand’s value has been calculated, we work with management and brand owners to identify strategies to increase the value of individual brand assets and the overall value of the business. Our objective is to deliver a valuable management tool as well as a valuation opinion.
Key components of our brand valuation work are Nevium’s Brand Score Tool, used to evaluate and compare brands across four dimensions, our IP Valuation Apportionment Model, used to value the contribution to financial performance provided by brands and other intangible assets, and Internet and Social Media Analytics. More information about these and other innovative Nevium analytical tools can be found on the Nevium Tool Kit page.
For further insight on brand valuation, see our article in the Value Examiner.
Nevium’s Brand Valuation Experience
Nevium has provided brand valuations for transaction due diligence, to evaluate brand extension and licensing opportunities, to compare pricing strategies and to evaluate marketing initiatives. For a client considering a name change, we helped management understand the value contributed by their current brand name and the value at risk if the name was changed.
For a not-for-profit professional training organization, their brand valuation analysis helped guide development of new product pricing strategies, licensing models and new revenue models that contributed to top-line growth of over 30%.