Brand Equity Increases Company Value

August 25, 2009 by  Filed under: Branding 

Are you maximizing your brand strategy? Is your firm enhancing the branding experience with current and potential clients? Which marketing and PR vehicles are you using to positively impact your company’s name in the marketplace? What you do now can have a big impact on what your company is worth later.

Studies indicate companies with solid brand name recognition are actually worth more than businesses with little or no brand recognition.

Why? Brands establish an emotional bond with the customer. Buyers choose brands based on perceived value and their own experience.

Customers prefer brands they know such as BMW, Coca Cola, Gillette, Tide and Wrigley’s. The brand equity of these companies adds a multiplier, 2x or more, to book value.

In addition, according to the BrandZ Top 100 Brands Study, a solid brand adds a number of other benefits.

1. It gives you the ability to create real and sustainable competitive advantage.
2. It drives revenue growth by ensuring higher demand and market share.
3. It helps improve margins by commanding premium prices and better supplier terms.
4. It reduces capital requirements by minimizing the costs into new categories.
5. It differentiates your company by overcoming commoditization and reduces overall business risk.

Think about it. In normal economic times suppliers like to “break into” a well known company and boast they are doing business with a well known brand name. Of course, they hope to do more business with that company down the road and grow the account.

Those suppliers often view their deal as much a Public Relations tool as a sound business agreement. To secure that contract they reduce prices or extend terms of payment.

Meantime those branded companies, well known in their targeted trade areas, can charge a little more for their products and services. Customers know what they are going to get. There is no guess work.

So the branded company wins on both ends. They pay suppliers less and typically charge customers more.

A brand differentiates your firm, provides competitive advantage, and adds value.

Whether you plan to grow or sell your company, a strong brand will pay dividends both now and in the future.

Stephen C. Turner is a Principal of Solomon/Turner, Inc., a Public Relations firm located in St. Louis (Chesterfield) MO. He has some 25 years of experience in marketing communications. Mr. Turner can be contacted at 314-205-0800 or

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