Putting a price on a brand

Last night I was watching Dragon’s Den with the husband. Having being avid followers of the program since it started I have noticed more and more how the Dragon’s criteria for investment has changed. No longer is it just about the Business Plan or strategy, it is now more about the brand. It all started with Levi Roots back in 2007. He clearly wasn’t a business man as his strategy was dubious to say the least. But Peter Jones bought into him and developed a business that was built completely on the Levi Roots brand. It is now worth around £55 million.

Last night, the brand buying theme continued when Deborah Meaden and Peter Jones paid £50,000 for a brand that was based on a pretty sketchy business proposition. Spoon {cereals} as a business concept wasn’t the most solid business strategy I have ever seen on the program but was one of the most solid brands I’ve seen. The whole look and feel, tone of voice, ethos and culture was clearly thought through. So while the business plan itself needed a lot of work it has the foundation of a solid and unique brand, and the passion and drive of the people that created it. This is what the Dragon’s invested in!

But how do you value how much a Brand is worth? It isn’t a tangible thing, it’s not a fixed asset, to some people it’s just a logo. Predicting the cost of a brand as you can imagine is incredibly difficult but what does illustrate the power of a brand is when we see cases of Business going into administration.

Take Woolworths for example, where the company’s assets were broken up and sold separately. The tangible bricks and mortar were bought by other retailers to expand their High St presence where the intangible but incredibly powerful brand was sold to the Shop Direct Group where they used the equity of the name to create a new online proposition. Some may ask why they didn’t just create their own brand…simple answer is that Woolworths had such a strong profile and loyal customer base people already believed and trusted it. It was never disclosed how much Shop Direct paid for the Woolworths brand but reports suggest (Daily Telegraph 25th June 2009) that Shop Direct paid approx. £10million. That’s a lot of money for a logo.

As we start to see more Brands being given a financial value it makes us think differently about them. We begin to see them as an asset, something that should be invested in and viewed as the foundation of what we do. We need to look after our brand, just as we do with bricks and mortar it needs to be maintained and well presented. After all it is the face of what we do.

Educating businesses about the power of a brand is something I do as part of my job as there is still the misconception that the brand is indeed just a visual identity. I really hope that this Blog helps to change the perception of a what a brand is and just how valuable it can be.

So if you’re considering in investing in your brand…and don’t necessarily want to spend £10million then please drop me a line. We have created a Brand Investment Guide to help you understand the level of budget you should consider. So whether you are looking to give your brand a bit of a re fresh or a start up looking to create a name and identity please drop me a line at:

Kerry.Howl@foggassociates.com

I’m always in!

Kerry Howl, Marketing Director