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Understanding and driving brand strength (and why it’s more important now than ever)

Intangible assets represent nearly 60% of the value of mid-market companies. A large component of this value is often either directly attributed to, or is reflected in, the business’s brand.

A brand portrays a wide range of aspects associated with a business, distilled into a name or image. At the extreme end, one need only think of Google, Amazon or Apple to understand the potential reach and influence of a brand, and the huge success that can be leveraged from a well-managed brand.

Understanding and driving a brand can be important from:

  • A commercial perspective: in driving the existing business or leveraging into a new line of product or service.
  • A transaction perspective: in communicating and driving deal value.
  • A financial reporting and compliance perspective: in ensuring sensible accounting and tax outcomes as part of a purchase price allocation.

Brand opportunities in the COVID environment

Now more than ever, your consumers’ relationship with your brand is crucial. Due to the COVID-19 pandemic, consumer confidence is low and people are making shrewder spending choices – but they are still spending.

There is opportunity to be found, just in new and different ways. With the ongoing efforts to ‘stay at home’ and ‘slow the spread’ of the coronavirus, brands have more of a captive audience as people watch more TV, and spend more time on their devices and social media. Many brands have had to adapt their strategy and value proposition to be sensitive and appropriate to the current environment. Those that do it well improve the relationship with their consumers and their brand perception (and arguably value).

Some have even found a way to have fun and bring levity to their audience. Editor’s note: the Netflix spoilers are particularly good – the concept seeks to curb the spread of the coronavirus pandemic by using the threat of spoilers to stop people from being tempted to socialise and encouraging them to binge on Netflix instead.

There are also those brands that have done themselves no favours.

The key challenge is to make sure your brand doesn’t appear to be opportunistic (taking advantage of a challenging situation) or out of step with the current times.

Indicators of brand strength

There are a number of factors that are associated with brand strength.  Understanding them can help you drive the strength of your brand in a way that is relevant to your business and your customers.  Below are some helpful questions to consider and observations involving recognisable global (and local) brands:

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Leveraging your brand value

A thorough understanding of the above factors can assist in achieving desirable commercial, transactional, financial reporting and tax outcomes.

As brands are inherently intertwined with the other assets of a business, it can be challenging to value them independently of other intangible assets (for example technology, product IP and customer contacts and relationships). Here is a complimentary tool we’ve prepared that may assist you.

If you’re interested in understanding the value of your brand or other intangible assets be it for a commercial, transactional or regulatory context, please don’t hesitate to contact us for a confidential conversation.

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