“Here’s an article about the value of brands I clipped from
the New York Times,” I said as they arrived. “It’s all about the rank of the
top brands in the world. But if you’re not publicly held, how do you figure out
your brands worth?”
“Why y’all lookin’ at me,” Bob said.
“Sweetie,” Kate said, You’re the brand guru in this bunch. Spit
it out.”
He glanced at the article and replied, “That’s the annual
review from Interbrand, what they call their Best Global Brands Report. They estimate
the value of each brand in dollars. There’s a financial analysis, a percentage
score for the role of the brand in its market place and a loyalty score. They stir
all that round, crunch the numbers and as my granny used to say, the cream rises.
It is a formula-based number that is supposed to tell you how much
investors trust the stock. If you run a privately held company you aren’t
included in their assessment.
Little guys have to find another way.”
Chris said, “I’ve got one. A while back one of my clients
was asked to sell his URL. He had paid under a hundred bucks for it. After the
negotiations it sold for thousands.”
Kate said, I can add to that. There was an old wooden
cabinet kind of radio company that went out of business but the folks that
owned it kept up the trademark on the name. They sold it for over $200,000 as I
recall 25 or 30 years after they went out of business. The name came back on a
line of computers. I actually had one.”
Bob asked, Didn’t you tell me ‘bout some research that kinda
gave a value, Fletch?”
“I think you mean the satisfaction studies I include when I’m
speaking about Marketing Without Money TM. What those boil down to is that you don’t
have a brand until you get to about 4.5 on a five point satisfaction scale. That’s
when people will recommend your product or service. At 4.6 they will repeat a
purchase. A 4.8 they will wait for you to introduce a product or service even
if a competitor already has one. Over five they are raving fans and the best sales
people you will ever have.”
Rick said, And if you know how many of them feel that way
and what their life time value (LTV) is you can calculate exactly what they are
worth to you. One company I know has a definable market of 15 Million people. If
they can get just one half of one percent of them to buy a subscription they
could clear over $22 Million. And that’s just in the first year.
How would you tell a little guy to value a brand?
Jerry Fletcher adds brand value through Positioning, product
development and the power of promotion on and off-line www.JerryFletcher.com
Jerry Speaks to corporate and association audiences
that are changing the way business is being done on three continents www.NetworkingNinja.com