Thoughts & News
In the CJ Patrick presentation and later reiterated by David Haigh, of Brand Finance, it is suggested that intangible value makes up 2/3 – 3/4 of a company’s market value. Intangibles, according to the authors, are trademarks, patents, copyrights, proprietary processes, procedures, specialized knowledge and credentials. The tangible assets are than real estate, inventory, booked sales, etc.
So if one wants to increase the value of a business, they have choices: Increase inventories, buy more real estate, book more sales, or focus on your intangible assets. The latter making far more sense both practically and economically.
Okay, focus on intangibles, but how? One easy way is to create a “Brand Bundle”.
First, it is important that your company’s brand be clearly in place, recognizable and easily communicated both internally and externally. If it is, then let’s get on with the bundling. (If it is not, then we need to have another conversation)
Almost everything a company does that is unique is probably trademarkable. For instance, a Specialty Aluminum Products Manufacturer in California and Georgia says its customer service is second-to-none. So, the company formalized and branded its customer service approach as “You First™”. They also claimed to have an industry leading quality control process. It’s branded as “V-Class™ Quality Assurance”. As well, they suggest that they help their customers become more successful through information sharing. On the Web site, there is a navigation button that says “KnowlEDGE™ Center”.
When all these trademarked processes and procedures (called Brand Points) are added to the other, already in place, proprietary practices, a brand bundle is created. It becomes a collection of assets or portfolio of services none of their competitors can provide.
When you apply any of the four most commonly used business valuation methods, (Cost-based, Market-based, Economic use, Formulary and Special situation) it is easy to demonstrate and add substantial value to the company’s overall worth.
Now many managers may suggest that they only need to go through this process if they are preparing for a merger or acquisition. Not so. According to Wes Anson, CEO of Consor Intellectual Asset Management, in San Diego: “With the increasing importance of intellectual property to the value of businesses today, it is imperative to understand and identify key brand assets, then value and manage them effectively for sustained growth.” As well, these branded methods of operating mean premium pricing right now (There is always a premium price for branded products and services over generic). They also add trust, preference and certainty when dealing with existing customers and in presenting to prospects.
Even though these tactics may be created through your marketing group, these are not marketing assignments. Each Brand Point should be discussed and identified as strategic business initiatives by the C-suite. Then all should be upheld and promoted to all employees, strategic partners, suppliers and stakeholders and most importantly, clients.
So, if your company would benefit from greater worth, and I can’t imagine one that doesn’t, try creating a Bundle of Value.