One of the tricky things about brand valuation is the evidence that brands act as multipliers on the performance of a business, rather than having a single, absolute value.
The research we did at BrandEconomics using the BrandAsset Valuator data from Young & Rubicam and the EVA data from Stern Stewart demonstrated that brands are more valuable in the hands of better run businesses. Our analysis showed that increasing the brand strength of a poorly performing business lifted its valuation multiple by around 20%, but improving the brand strength of a well-performing business raised its valuation multiple by 50%.
This reinforces the point that I have made many times – that brands are an integral part of a business system, and that it does not make sense to attempt to value them independent of the other elements of that system. The customer is paying for the entirety of the experience, not the individual elements in isolation.
