Never mind the love, smell the money: What is the ‘value-add’ of a brand?

Abstract

In spite of the use of terms like ‘brand love’, the language of human relationships is rarely appropriate to most brands, and such terminology excludes the majority of users who invariably have only very limited brand engagement. An alternative approach to improve the appreciation of the impact of specific brands is to think in terms of the added value that consumers attribute to brands relative to one another. Brand Margin uses a ‘wisdom of crowds’ approach, drawn from a whole market and not just from those who engage closely with a brand, to generate a financial value for the added value a brand delivers above the intrinsic cost of a product. Although developed for fast-moving consumer goods (FMCG) markets, this concept works well in other sectors where there is essentially a common product, with the brand being one of the few points of differentiation. Examples are discussed from the travel sector, for hotels and airlines, but utilities and telecoms would be just as relevant. Brand Margin is a business outcome metric, and its use of a financial benchmark gives it a resonance in the board room and among non-marketers.