Ben Wise on Branding

Watching the world through the lens of the brand

Are Brand Valuations Worthwhile?

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I get skeptical when I read about brand valuations. They seem to reward the companies with the most revenue and rarely reflect consumer sentiment.

Interbrand just published their top 10 retail brand values. The top three were Walmart, Target, and Best Buy. I don’t know the exact figures, but they are also among the top retailers in total revenue.

Obviously, the revenue generating potential of a brand must be the biggest determining factor in the value of a brand. However, their existing revenue is not always a result of their brand and separating the drivers of revenue can be difficult.

Certainly, Walmart will generate billions of dollars of revenue for the next several years. But how much of this revenue comes from their existing size? The power they have over suppliers? Their huge distribution capabilities?

Brand valuations often rank Rogers as one of the most valuable in Canada, but if you were to ask Canadians for their impression of the brand, they would almost unanimously reply with negative feedback.

At its essence, a brand is a promise made to consumers. Some promises are stronger than others. I’d love to see a brand valuation that placed a bigger emphasis on consumer data. Are consumers advocates for their brand? Working tirelessly to promote the brand and convince others to shop there? Rogers customers definitely don’t do this. I’m sure some Walmart customers do. But an awful lot of customers of the Apple store do this. Same for Amazon, who only just cracked the top 10.

What do you think? Do brand valuations fairly reflect the value of a brand?

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Written by benwisebranding

March 15, 2010 at 5:23 pm

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