How Do You Measure the Value of a Brand?

This is part 12 of a 13 part series identifying who Wildstory is, what the intricacies of branding are, and how this can all benefit you.

Video Transcript

Keith Roberts 0:04

Wow, that's cool. There are some brands maybe like a blockbuster that could use some of this insight to help put some strategy at some essential times. Which, you know, being such a huge company. How do you quantify that? How do you measure the value of the brand? I mean, the blockbuster is an interesting example, blockbuster, and Netflix. I mean, it was just overnight one became the other.

But if I'm not one of these giant brands, or I don't have a disruptor, like, Netflix, or Uber, or Airbnb, changing my industry, how do I measure the value of my brand?

Marc Gutman 0:38

Yeah, that's a great, great question. We get asked all the time. And, you know, as I mentioned, it's kind of like this fuzzy thing that that's different, you know, and there are some, you know, there's, there's there are brand valuation lists out there, I think Interbrand is one of the ones that is the most popular, you can go download for free and see, like the world's most 100 valuable brands, they have a whole way of doing it. But I think, you know, you know, for companies that are maybe a little smaller, not going to be on the Interbrand list or something like that. There are basically five ways that you can measure the value. And I think the first and most important is, is a price premium.

Right? Like, how do we get the highest price possible? For our products or services, you know, like, only one competitor in any given market can be the cheapest? For all the rest, there's branding, you know, like, only one person can play the price game, you know, you can, who doesn't want to command a higher price, who doesn't want to get more for their products and services? So that's number one. Customer preference, right? Like so, you preferred X amount of percentage over the competitor? Like, you know, are you the leader in the category?

Typically, that's branding, you know, Coca Cola, they have a customer preference model, where most people prefer coke isn't better than Pepsi, you can argue that, you know, but it's their competitors. And there you go. Tesla, right there the customer preference for cars for electric vehicles, I'm sorry, replacement costs. I love this one. Because I you know, you and I are always kind of thinking about different businesses, we're spinning up different businesses. So how much would it cost the brand to build again, from scratch? You know, like to get to where you are today? You know, if you think about any established like, I mean, could you build an Airstream from scratch today? People are trying every day, there are competitors every day, I don't know what it costs, but I'm thinking it's billions, you know. So when you're thinking about buying or selling a brand, this can also really be applicable for bigger companies stock price.

So as I mentioned, I mean, we are, you know, most of the stock market, especially what we're seeing today is all based on a shared vision of what we think the brand is going to do in the future, not what the actual value is. I mean, it's crazy, you know, like, you look at like, the market cap of so many different brands, and then future earnings, this becomes real with valuation, if you have a company value your business, like what kind of multiple Are you getting based on what they think your brand, the fat brand value is of your company. So those are five ways that you can easily measure brand value. And that is a direct reflection of your brand.

There's a lot of other studies to where they, for bigger companies like Coca Cola for like a Tesla, they actually would say, what the market cap would be without the brand influencing impact, and what it is with the brand and you can you know, we can, you know, link to those, you can look for those on the internet, but those are pretty interesting, too. But again, I'm not a Tesla owner, in terms of like, I don't own the company, so it doesn't, you know, that doesn't affect me as much as some of these others.

Keith Roberts 3:31

Interesting. I really, I mean, the replacement cost I love having this different lens than just looking at a multiplier if you could write based on your industry. So super, super interesting, man.

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