BRAND EQUITY!

Have you ever wondered what BRAND EQUITY is?

Well like many of the areas in branding and marketing you will probably get a dozen different answers from a dozen experts. And that used to include me!

When I started in the business I was told that "Brand Equity" was the added value that consumers put on the product that they had purchased. It was what they perceived the difference between the products that were competing in any given category. It was also how they valued the product emotionally, especially when they were in a purchasing situation where they had to make a choice between competing products. This was not something that could be easily measured, but never the less was very real!

Certainly some experts will still tell you that this is in fact the case, and this my friends is where I disagree!

BRAND EQUITY in my opinion is all about added owner or shareholder value that can be measured as it relates to a specific product or a company. But unfortunately it is also a $ figure that according to the US Principals of Accounting cannot be included in our balance sheets.  Which really means that Brand Equity is not real and therefore will not manifest itself in any way? This does not make sense to me at all; let me tell you the guys on Wall Street have figured it out. They call "Brand Equity" INTANGIBLES. It's that amount of money that people will pay to buy the product, company or stock over and above what the balance sheet reports.

For instance the biggest brand in the world is arguably Coca Cola, and at the time of writing its stock was trading around $50. Well $35 of the stock is BRAND EQUITY, that's around 70%. That's huge isn't it? According to Interbrands report on the "Best Global Brands" their valuation of Coke's brand equity is about $67 billion, that's bigger than some countries!

While the 70% Brand Equity of Coca Cola is an exception, according to Interbrand, the average across the leading stocks is around 27%, and that number probably fits your business too!

The tough part is how do you find out what the BE is worth, believe you me there have been many people who have tried coming up with a formula that works for everyone. But to be frank I have not really seen one that truly works faultlessly. There are some formula's that you can look at, one is from my old Alma Mata Omnicom's Icompany, Interbrand, they have their "Brand Valuation" system and if you click here you can see a chart of part of how they see it working. This appears to be a formula that works as they have been applying it to come up with their annual "Best Global Brands" that is featured in BusinessWeek.

.

I must tell you before you download the information that it is difficult to go through the process and truly understand all of the nuances. Also they are smart enough not to give you every single piece of information and you will have to do some homework yourself. To be frank with you I was a little confused by some of their explanations so I took the formula to a friend of mine who is a partner at Price Waterhouse Coopers to see if he could explain it in lay man's terms. He tried and still came up short, he basically said that they were not giving all of the formula but it was a good place to start. The net result was that he suggested use the formula and add your own information so that you can work out a system that is consistent and works for you.

Or of course you can contact Interbrand.

Net result of all of this is that you should do the homework, then talk to your accounting folks and work out a formula that fits you, but more importantly you must use it on a consistent basis. I recommend that you work out your brand equity at least quarterly but monthly would be better.

This whole area of measuring your Brand Equity is something that should be at the heart of your business and that is the whole "MEASUREMENT" area, I like to call it the "Measurement of Success". I am a great believer in measurement; if it's not worth measuring then it's not worth doing.

Measurement should be pervasive throughout your company, and it should start with you and your people. I am a great believer in that every single employee should be measured for success and more importantly, they should want to be measured.

I can tell you from over 30 years of practical experience that the top performers want to be measured, it's the losers that don't.

This leads me to getting the right people in your business in the first place. You see that chances are that 20% of your people are looking at Monster.com or have paper on the street as we speak.

Frankly this is not a bad thing, as long as we appreciate that it is the case. Because now you can do something about it and put a program in place that will ensure that you don't find yourself in the following situation. It's Monday morning and Joe has just told you that Bill has quit, what are you going to do? You have to get someone "Quickly with Experience", right? Well if you don't have a whole drawer full of applicants that you have been trying to recruit, then frankly "you are up you know where without a paddle".

My recommendation is that you understand that "Hiring is a process not an act". I will get into this whole process hiring, looking after, and growing people in quality and quantity in the next issue of BRAND NEWs.  You see the thing is that people are your BRAND, and you have to make sure that they deliver your brand message in the way that you would deliver it yourself.

Finally: If you have any specific areas about Branding and Business that you would like me to address in future editions of BRAND NEWs, again, e-mail me at info@jacksims.com

Click here to see previous issues of BRAND NEWs

If you use a spam filter, please add my email address to your list to ensure you get future editions of BRAND NEWs!

Well thank goodness, the cast is off, to be frank with you the first few days with the cast on was like hell! I hated it, it drove me nuts, it felt claustrophobic and it itched, I know what a big baby! But the good news is that it's off and of course I assumed I would be playing golf the very next day, wrong! I guess there will be a few weeks of rehab! The bad news is of course that I cannot get away with not doing chores any more.

ONE TIME SPECIAL OFFER for my BRAND NEWs readers!

It's a management classic, the authority on customer service... I'm talking about Positively Outrageous Service the best selling book written by my friend T Scott Gross and as a favor to me he's making it available to BRAND NEWs readers for only $15 INCLUDING postage and handling! This is a huge saving off the retail price. Call his office at 830-792-5555 to order your copy, but you MUST MENTION Brand News to get the discount!!

Las Vegas

I just had a fantastic few days in Las Vegas and one of the events I spoke for was the Vacuum Dealers Association. What a great group, we had a great time and from the comments so did the audience.                            I was staying at the Hilton, and I must admit I have always been an Elvis fan, and every time I see the statue of him at the entrance gives me a buzz!

Indianapolis

Met some great people in Indianapolis speaking at the National Frame Builders Association. I gave my session called "Most Marketing Stinks, but yours can smell like money" and it got rave reviews

High & Dry -HIDDEN GOLF CLUB STAND

If you remember I tried out for the next Golf Channel TV Show, and as of this writing I have just heard that I have made the cut and will be moving on to the next round of the selection process on March 26th. 

On the product front, things are looking good and we should have the final product completed by April.

A big disappointment so far is that I do not seem to be able to find a US manufacturer and I will probably have to go to China. A sign of the times I am afraid!

The website is getting closer and I would like to invite you and 10, 000 of your closest golfing friends to visit the www.highanddrygolf.com web site soon. Please let me know what you think of the product, I would seriously appreciate your input.