Brand Value-Just a Number?

“A brand for a company is like a reputation for a person. You earn reputation by trying to do hard things well.”
― Jeff Bezos

Branding and brand valuation is often tied with perception, recall value and last, but not the least “the big bulky monetary number”! Sometimes reason fails my senses as to how some corporations and individuals are burdened with such “astronomical numbers”! Royalty, M&A, turnovers are some of the direct co-relations which work with Brand Value. An intangible being tied with a number is not a rocket science though. Monetary Brand valuation is based on common valuation techniques. It is the intangible apart from the Rs. or any other currency value which gets lost in the translation though!

Brand valuation techniques can be clubbed into 3 distinct categories. Last method is most prominently used to identify a firm’s financial value and relate it to the Brand with appropriate discount plus home country based tax rates.

• Cost based – Underlying principles based on Real Estate
• Market based – As the literal meaning says based on comparing worth with the underlying market dynamics.
• Income based– Based on Present Value for the useful life

What gets missed in this entire so simple jigsaw puzzle based on financials is the “people” aspects who are behind the Brand. Most organizations do not showcase employee productivity and their direct contribution on their financial statements. It is more so in the case of large product or utility oriented companies. Service organizations though try to measure key ratios related to productivity and people availability. For latter it is part and parcel of the revenue model.

Empirical studies and consulting reports emphasize on the causal 2-way relationship between brand valuation and employees. Profit per employee, Revenue or income per employee are key benchmarks for brand valuation. On the other side a higher brand value leads to reduced employee attrition and subsequently reduced turnover.

Jury will always question what leads to higher employee productivity. But, under a set of salient work conditions, considering same macroeconomic environment and skill base, any increase in Revenue per employee impacts brand valuation positively too.

Which leads me to the question, why do organizations feel reluctant to measure the Revenue or Income per employee indices? Does consumer and top-line focus takes away the appreciation from one’s own employees? Skilling or Re-tooling and not to miss the “motivational” aspect (of employees which results productivity gains) are key catalysts in the “Financial valuation” of a brand.

How does your organization cater to tangibles and intangibles of brand valuation? Do they recognize Revenue or Income per employee as key metrics? Are employees regarded as “drivers” of the brand and its Rs. (€ or $) valuation? Looking to hear your story and comments.