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Connect Your Brands to Your Bottom Line with Brand Finance

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BrandFinance

Over the years, the word ‘brand’ has meant many things. Where it was once only a piece of burning or smoldering wood, or an identifying mark burned on livestock, it’s now a common term for products manufactured by a particular company under a particular name. From Google and Facebook to AT&T and Nike, most of us interact with dozens of brands every day.

When you’re running a business, your brand is a valuable part of it. But how do you define that value and use it strategically to increase your company’s success? RewardExpert recently spoke with Laurence Newell, Director Americas at Brand Finance, the world’s leading independent branded business valuation and strategy consultancy, about how the company can help you answer those questions and more.

Laurence Newell
Laurence Newell
Director Americas at Brand Finance

Bridging the Gap Between Marketing and Finance

Founded in 1996 and headquartered in London, Brand Finance is a multi-national company with a presence in 20 different countries. Newell said the company’s name perfectly describes its value proposition.

“Our mission is to bridge the gap between marketing and finance,” Newell explained. “It’s a mission that has become even more relevant given the pressure on marketers today to prove that what they are doing for a company is generating revenue and adding value.”

Newell noted that marketers and financiers traditionally have not spoken the same language.

“Marketers haven’t been well versed in finance and financiers haven’t known all that much about marketing,” he said. “Brand Finance establishes a common language between the marketers and financiers we work for to ensure we’re measuring what matters related to brand performance and brand value as well as providing the analytics, or the proof, of what drives better return on investment from a marketing point of view.”

Brand Finance performs roughly 5,000 brand valuations per year. “That’s probably more brand valuations a week than some of our competitors do in a year,” Newell added. “It really differentiates us. We’re very singularly focused on proving marketing works from a financial standpoint.”

Valuation, Analytics and Strategy

Newell said that Brand Finance’s “claim to fame” is the company’s branded business valuation service. “As you well know, brands are part of a company’s property and, as such, are considered intangible assets,” he explained. “What we’re doing, at the end of the day, is putting a value on that intangible known as a brand.”

Who we are
Image via brandfinance.com

What a business does with that valuation often depends on who hires Brand Finance. “When we’re called to the table by marketers, they usually want to talk about how brand valuation informs brand strategy,” Newell said. “They really want to know how the brand generates demand among different consumers or stakeholders.”

To help these marketers inform their strategy, Brand Finance can provide a brand scorecard illustrating how the brand is performing against a set of competitors. “We can look at the brand scorecard from an investment, brand equity and brand performance standpoint,” Newell said. “How are you doing against your competitors in a specific industry or market?”

Oftentimes, Brand Finance works with businesses that own multiple brands within one portfolio. “Maybe they have five different brands and a certain amount of money to put behind them,” Newell said. “Where will they best be served by allocating those funds?”

To answer that question, Brand Finance can provide brand architecture and portfolio management advice. “It’s really helping clients identify where they can get more bang for their buck,” Newell added.

brand scorecard
Image via brandfinance.com

When the financiers or accountants at a business call on Brand Finance, they may do so to analyze the potential of a merger or acquisition. “Maybe you’re considering buying or acquiring a competitor or a portfolio of brands in another country,” Newell explained. “What’s the fair value of those assets? What would be a reasonable asking price for those assets? Brand Finance can answer those questions.”

Small Business to Fortune 2000

Newell said that Brand Finance works with businesses in a range of industries. “We’ve had the opportunity to work with some of the biggest and most iconic brands across the telecoms space, financial services, consumer goods, retail, airlines, you name it,” he explained. “The majority of our clients are probably Fortune 500 to Fortune 2000 companies.”

That said, Newell notes that Brand Finance has also worked with smaller companies who might not have the budget to pay their usual consulting rates. “We can provide brand valuations for smaller companies that are interested in understanding what their brand is worth based on the publicly available information in our over 5000 valuations a year,” he said.

Increasing Brand Value

Every year, Brand Finance releases an annual report on the world’s most valuable retail brands. Topping the list in 2018 was Amazon, whose brand value rose 42 percent to $150.8 billion U.S. dollars. Also landing within the top five were Wal-Mart, Alibaba, Home Depot and IKEA.

“We’ve studied retail considerably and there are three things that make a retail brand valuable,” Newell said. “One, without a doubt, is having a very clear value proposition and reason for existing in a consumer’s mind. I mean, retail is where the rubber meets the road regarding choice and brand decision making.”

Reports
Image via brandfinance.com

Newell said delivering a consistent experience is also critical to brand success. “When you look at the Wal-Mart, Home Depots and IKEAs around the world, they are hyper consistent from an operations standpoint,” Newell explained. “Your experience with the brand, from state to state or even country to country, is going to be very consistent. That helps to form a certain perception in the mind of the consumer.”

Finally, coherence across the branded touchpoint adds value. “You don’t want to provide mixed messages,” Newell said. “You basically want to identify what the three or four things are that make your brand tick and make sure you’re conveying that message across every touchpoint, be it mass media, the Internet, digital or couponing. Strong brands tell the same story at every opportunity when placed in front of a consumer.”

Future Plans

Newell said that Brand Finance is always looking for ways to further differentiate their services from the rest of the marketplace. “That’s what keeps us on our toes,” he adds. “One of those things is the intellectual property we provide. Our brand value ranking industry tables are the biggest –whether it be airlines, restaurants, oil and gas, telecoms, financial services, banks, even stock markets—we have so much information coming out continuously.”

Learn more about Brand Finance at brandfinance.com.

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