What is Brand Valuation? How to derive Branding ROI

Are you a business leader who believes that developing a strong brand and considering brand strategy is an absolute luxury? If so, you are one of the CXO-level executives that think tactical marketing campaigns alone are sufficient and that the return on branding is uninteresting. However, this is not true! In our Blog today, we will talk about our compilation of research from many resources on brand building that explains how branding improves financial performance by generating intangible assets on businesses’ balance sheets.

1. Branding Kinds

Branding is one of the essential corporate techniques for increasing commercial value. Creating a strong brand makes it easier for your products to shine from your rivals. With Branding, the customers will pick your goods more frequently, even if the price is set premium or at a lower acquisition cost.

Apart from promoting products, it can also promote higher staff retention rates. It keeps current workers motivated and draws in new ones. It might make the organization stand out and strengthen internal ties.

Hence, Branding can come in many forms following are 21 types of Branding:

2. How Can We Value Branding?

Now we know that there are many types of Branding, so the main question is how to calculate the Value of Branding.

To check the brand value through numbers, let’s look at Ocean Tomo’s 2020 study. It shows that the S&P 500 Market Value increases from Tangible to Intangible Assets of businesses. It means that brand value, intellectual copyrights, patents and trademarks has increased.

3. Calculating the Return on Investment

Marketing ROI refers to attributing revenue and profit growth to the results of marketing efforts. The sales increase for that company or product line is taken, the marketing expenses are deducted, and the result is divided by the marketing expenses. For example, if sales increase by $1,000 and the marketing strategy costs $100, the simple return on investment is 900%. (($1000-$100) / $100) = 900%.

4. Elements of a Powerful Brand

Now that we know the importance of Branding in the industry, it is vital to comprehend how branding makes a product/service powerful. When we look at the market indices of some of the most powerful brands, we can see their interest rate.

Hence, we found out the following ten criteria to determine the World’s good brands:

Definiteness
Commitment
Dedication
Existence.
Authority
Reliability
Speed of response
Differentiation
Reliability
Sincerity

A global market research company called Kantar Millward Brown defines powerful brands as having the following characteristics:

Meaningful: These businesses satisfy consumers’ needs and expectations while drawing in additional customers and winning their love.
Distinction: Their distinction enables them to create favorable trends and gives customers a first-mover advantage.
Salient: They tend to stand out and emerge in consumers’ perceptions as the brand of choice for particular demands.

Moreover, the international consultancy named Prophet published an index of the Most Relevant Brands in the World. It ranks brands based on the following criteria:

Client-centered: the companies that build, finance, and sell products in response to consumer demands.
Unapologetically pragmatic: These brands’ core values revolve around consistent experiences. They make clients’ lives easier by ensuring that the products are available whenever and wherever they need them.
Inspiring: These companies achieve a greater goal, create an emotional bond with customers, and gain their trust.
Widespread Innovation: These companies use innovation, innovative engagement with customers to close the gap between the unmet demands of consumers and the products they offer.

Hence, by following these criteria, the strongest and most relevant brands will outshine all those who don’t allocate funds to Branding as part of their corporate objectives.

5. Powerful Brands and Expensive Pricing

You’re doing well when your brand can set its prices without losing clients to the competition. In assessing any business, pricing power is one of the most significant factors affecting the rate of return on Branding. Strong brands, therefore, frequently set prices in the business.

Thus, a business owner has the following price choices to boost the investment in Branding:

Using a premium price to enhance the current brand’s strength.
Repositioning their brand by emphasizing unmet demands to tap upon untapped market potential.
Upending the mainstream brand category and broadening the business approach.

An effective branding strategy takes advantage of this by attempting to build a meaningful, robust, and long-lasting relationship with the target audience. It influences preferences and favorably changes customer interactions from being about products to bringing about experiences.

Our Clients:

1. Big Rolls

Branding

Vowels Agency gave branding service to F&B Brands: Big Rolls. They came to us with a vision, and we transformed it into a marketing plan with an impressive strategy that could help them gain their identity and get more sales.

2. Omni Ice-cream

Brand Identity and Packaging

We provide Omni Ice-Cream with a beautiful and vibrant brand identity plan that could elevate its visual appeal in the market. Our focus was on the colour palette for the brand identity because it is also used in the packaging.

6. Work with Vowels

Branding will work best for a business who wants steady and long-term connection with its customers. Strong, iconic businesses capitalize on consumer emotions and build brand loyalty. Many well-known brands in the UAE are concentrating on bolstering the foundation of their current businesses with various branding strategies.

7. FAQs

Q. What is the definition of ROI in marketing?

Ans. It is about how much revenue the campaigns have generated for the business.

Q. Are there any ROI standards?

Ans. The ROI technique includes guidelines referred to as “Guiding Principles.” These give the research a conservative approach coherence.

Q. Do I need statistical knowledge to understand ROI?

Ans. Most ROI effect studies require only the most fundamental statistical methods. Statistics are rarely required beyond basic averages, variation, and standard deviation.

Q. Which ROI is considered good?

Ans. ROI that comes to more than 7% is considered good for investment.