Your company’s brand should be an important focus for increasing and sustaining financial performance, according to David Haigh, CEO of Brand Finance. He and most brand advocates suggest that brand value represents the profits that can be attributed to future sales generated from brand loyalty.
The brightest minds and most trusted firms also agree that, on average, intangible value can account for 33 percent or more of a company’s total value. For nationally recognized consumer brands, intangible value can be well over 60 percent of book value.
Intangible value is trademarks, patents, copyrights, proprietary processes and procedures, specialized knowledge and credentials. The remaining value are the tangible assets that include real estate, inventory, booked sales, equipment and the like.
So if experts are right, and business owners want to increase the value of their businesses, they can: increase inventory, buy more real estate, book more sales — or focus on intangible assets. Focusing on intangible assets may make more sense, both practically and economically.
A collection of assets, a portfolio of services
OK, focus on intangibles, but how? One easy way is to create a brand bundle.
First, it is important that your company’s brand be clearly in place and recognizable both internally and externally. If it is, then proceed with bundling. If it isn’t, then start establishing the company’s brand.
Almost everything a company does that is unique is probably worthy of a trademark. For instance, a specialty aluminum products manufacturer in California that says its customer service is second-to-none formalized and branded its customer service approach as “You First™.” It also claims to have an industry leading quality control process, which it branded as “V-Class™ Quality Assurance.”
When these trademarked processes and procedures are added to the other trademarked products, brand statements and proprietary trade procedures, a brand bundle is formed. It becomes a collection of assets or a portfolio of services competitors cannot claim to provide.
Manage brand assets for sustained growth
When you apply any of the four most commonly used business valuation methods — cost-based, market-based, economic use and formulary and special situation — it’s easy to demonstrate and add substantial value to the company’s (or owner’s) overall worth.
Some CEOs may think they only need to go through this process if they are preparing for a merger or acquisition. Not so.
According to Wes Anson, CEO of Consor Intellectual Asset Management, “With the increasing importance of intellectual property to the value of businesses today, it is imperative to understand and identify key brand assets, then value and manage them effectively for sustained growth.”
Each brand asset should be discussed and identified as a strategic business initiative by the core leadership team. Then, marketing can come up with proprietary names and the legal team can file for trademarks.
Once in place, promote proprietary brands to employees, strategic partners, suppliers, stakeholders and most importantly, clients.
If your company would benefit from greater worth — and I can’t imagine a company that couldn’t — try creating a bundle of value.
Kelly Borth is the CEO and chief strategy officer at GREENCREST, a 25-year-old brand development, strategic and interactive marketing and public relations firm that turns market players into market leaders.