What Is A Good Way To Measure Brand Value?
If you are looking for a way to calculate the brand value of your company, you have probably come across the cost-value method. This method involves calculating the amount your company spends on brand-building activities, such as hiring branding agencies, paying for promotions and trademarks, and paying the salaries of brand-focused employees. However, this method does not reflect the brand value in the public sphere, and the value of your brand may change depending a customer data platform – Epsilon on how much money you spend on branding and how much your industry changes.
A reliable measure of brand value is brand equity. If your brand is well-known and trusted, customers will seek you out and use it. This translates into repeat purchases and less reliance on your outreach efforts. Furthermore, if your brand has a positive emotional connection with customers, they’ll recommend your business. So how do you know whether your brand is valuable? How much are brands worth? High brand equity will also have a low price elasticity, which means consumers are less likely to switch to a competing brand with a lower price. It is also more likely to sell products with high brand equity, enhancing the company’s negotiating power. Negotiation with suppliers is inevitable, but it is easier if your brand has high brand equity. Therefore, its brand value is one of the most critical indicators of a company’s success.
Cost-value of creating and building the brand
To calculate the cost-value of creating and building a brand, companies must first calculate the costs involved in developing and implementing the brand. This includes the costs of hiring a design agency, executing a marketing plan, and seeking sponsorship or PR exposure. This method is based on concrete prices and does not consider changes in the industry, public perception, or time spent promoting the brand. Below are some costs that affect the cost-value of building a brand.
Competitive position in the market
A brand’s competitive position is determined by how well it fits into the market and how well it differentiates itself from the competition. While establishing a competitive situation, the marketing team also considers the audience’s needs and current trends. By analyzing a brand’s competitive position, it can identify opportunities and develop its positioning in the market. It is also essential to establish a strategic plan for the company.
A brand’s competitive position is defined by why customers spend more money on the brand than its competitors. Brands with strong competitive positions have a higher market share and lifetime value. CPs are directly related to industry health. High CPSs indicate a healthy industry. Low CPSs, on the other hand, suggest a low level of differentiation and reliance on price competition. Understanding the importance of CPs and determining a brand’s competitive position in the market is essential.
Net promoter score
The Net Promoter Score (NPS) is a crucial tool for measuring word-of-mouth traffic, which is essential for continued business growth. According to the study, 92% of consumers trust the recommendations of family and friends more than other types of advertising. In addition, consumers trust word-of-mouth at several stages of the buyer’s journey. In developing markets, word-of-mouth is even more critical.
While NPS can measure overall customer satisfaction, it does not explain why a customer might be satisfied or dissatisfied. While the worst possible score is -100, the best possible score is 100. In real life, this is unlikely to be the case. This is because passive respondents count towards the total number of respondents but do not contribute to the percentage of promoters or detractors. A passive response would push the overall score down toward zero. For this reason, it’s vital to ask various questions, including how satisfied customers feel about different aspects of the company’s products or services.
Historically, the average NPS score for American companies is -32. Conversely, the highest-performing organizations score between +50 and 80. The exact numbers vary from industry to industry and even within the same country. To increase NPS, companies can use open questions to probe why a given NPS score is low or high, allowing them to adjust their brand value accordingly. They can also increase the number of Promoters by reducing the number of Detractors.