The five steps to increasing brand value

As the tension mounts when the deal nears conclusion, many things compete for the principals’ attention.

Numbers, finance, staff commitment, business continuity … they all vie for priority status. But whether it is preparation for IPO, international merger or trade sale, somewhere in the process, someone will have put a value on brand and reputation. The maximisation of brand value is critical to the final price, and yet mystery surrounds both the creation and measurement of brand value. There was a time when gut instinct was sufficient. And more recently, science, academia and accountancy have all had a role to play. However, today, more than ever before, value creation is much more sophisticated than just educated guesswork. 

Somewhere between the annual Interbrand Best Global Brands survey, theoretical accountancy and gut instinct lies the delicate and fascinating world of brand valuation. Reputations created over decades can be destroyed in seconds by the wrong thing said, or done. There is a science to quantifying the intangible value of a brand or a business, and all power to those that specialise in the field, although anyone who has ever been to an auction house to witness an art sale will know that ultimately, it’s the market that decides the cost, irrespective of where the reserve price might lie.

And as with art, so with business, it is the unique combination of very tangible factors that combine to produce the intangible value. Was the artist’s style ground-breaking? Who were the followers? How influential was the patron? How extensive was the output? How long was the career? Who bought, and why? What did the critics think, at first, then eventually? And even if you had two works from two artists with very nearly identical provenance, there would still remain the element of personal choice.

Unity means simplicity, and simplicity means ease of understanding.

So, if you really do want high profile, sales success and value creation, how do you stack the odds in your favour? For us at Fifth Ring, whilst the practice may take time and effort, the theory is very straightforward. Above all, a brand must be about unity; the hard-won unity of vision, culture and image, the unity of clarity of direction, constancy of performance and consistency of messaging. As business owners and investors seek to create and maximise value in their businesses, we believe that unity means simplicity and simplicity means ease of understanding. The quicker a customer, an employee or an investor can understand how the value is created, the greater his or her interest and commitment, and this leads directly to increased value. And the opposite is true.

There is a downward spiral, which starts with poor brand management, which is perceived as disunity, or complexity, which breeds a lack of understanding, difficulty of valuation, reduced investor interest, and hence reduced value. Laziness may be a factor here, as investors just don’t want to work too hard to find out why or how a brand creates value. Understanding must be instant, and ideally, intuitive. As we said, the theory is straightforward, the practice can take a lifetime’s commitment and work, and as ever, there’s a multi-step process to get it right.

The five steps

Step One: Brand is not logo
So the question remains, how do you build that unity? The first part of the answer lies in the fact that to build a valuable brand, you have to know that brand is not just a logo. Let’s assume that you already know that it is so much more than that.

Step Two: Brand needs corporate alignment
Due diligence is a vital part of the deal. Buyers need to know what’s under every stone. But in the midst of deep considerations on corporate vision and strategy, make time for a realistic assessment of how the brand portfolio is or can be aligned to articulate the strategy. A premium may have been paid for an acquired brand, so there ought to be consideration as to how this value should be maximised.

Step Three: Brand needs marketing know-how
For generations, marketing was considered the poor relation; it was sales that really mattered. You could identify in an instant who had sold what to whom; but nobody could really tell what impact, if any, that advert, that press release or that new brochure had really had. But today, things are different. New, highly sophisticated ‘marketing automation’ techniques mean that marketers can provide real-time data on the impact of their digital engagement strategies. The new battleground for value creation rallies to the cry of ‘mind share over market share’, using data analysis and richly entertaining media to build strong and powerful links between sellers and buyers, between employers and employees and between owners and investors. Today’s savvy buyers know so much more about the marketplace than they ever did, because the information is shared freely by all the participants. And it is marketing that is building this deeper and richer relationship over time, setting up the defining sales conversation.

Step Four: Brand works from inside out
A less than enlightened ex-client once asked us why his staff needed to know where the business was going. As the question was surprising, so the answer was obvious: in business-to-business, you very often have many more staff than customers, by a factor in some cases of twenty or thirty times. As the main interface between the business and its revenue sources, at its most basic level, the staff must carry and deliver the same message. Ideally based on sound and embedded company values, staff behaviour, from communication to project delivery, must bring the brand to life. If you have a choice of investing in better informing your staff, so that you can be sure they are transmitting the right messages or buying a billboard at the airport, always choose the internal option.

Step Five: Brand needs professionals
Let’s assume too, that as you are dealing with something as fragile as brand reputation, as business-to-business marketing communication is in the midst of a fundamental shift, you’ll see the need to seek the right kind of help and support. Consider the client issues that we deal with on a daily basis and ask yourself, could you or your clients provide the right solution to these questions, without professional help:

  • How can I better manage my portfolio or brand to reduce my costs and increase my profitability?
  • How can I improve my business’s reputation in the market, to attract the best talent?
  • How can I motivate my staff and drive better business performance?
  • How can I reposition my business in the market and render the competition impotent?
  • How can I marry my idea with that sleeping brand / business to create a new market opportunity?

 

We get asked these questions, because people like you want to create value, right now. As many of them are impatient, senior engineers with years of global oil and gas experience, they want to take know-how, develop valuable products and services that maximise their knowledge and disrupt established practices in a traditional risk-averse supply chain. It’s ambitious, it’s personal and it’s exciting. And as the principle international brand strategists in the sector, we have worked with organisations like yours, on many issues like these, to help realise the wealth created by these entrepreneurs.

At Fifth Ring, we could not have created and sustained our international industry-leading position without true professionalism for twenty-four years and throughout this time, we’ve employed bright, qualified, creative people and trained them to think deeply about what they do, to develop and articulate simple messages that convey the unified proposition quickly and accurately. If you would like to learn more about how Fifth Ring has made the thinking visible and valuable for our clients’ brands, just get in touch at peter.lyall@fifthring.com.

Peter Lyall
Peter Lyall
Group Director, Strategy

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