Brand Value Depends on Brand Fans

According to global Mergers and Acquisitions data, brand valuations have declined by nearly half, and customer relationships have doubled over the past decade. In other words: Brand fans are what makes brands valuable!

This mind-boggling fact comes courtesy of a new study, which has looked at the value of brands and customer relationships as revealed by Mergers and Acquisition data covering 6000 M&As worldwide between 2003 and 2013. The sometimes intangible assets being measured include brands and, crucially, customer relationships. And indeed, brand valuations have declined by nearly half, while the value of customer relationships have doubled over a decade. All other categories of intangibles remained stable.

According to the Brand Republic article Brands are out, customer relationships are in,

Companies acquiring other companies have moved from investing into businesses with strong brands in favour of businesses with strong customer relationships – with all the loyalty and cross-selling benefits that it suggests.

The reason? Digital technology has changed marketing, and brands can now interact directly with consumers, reducing marketing costs and establishing stronger brand-consumer bonds at the same time.

What brands need to keep in mind, though: You have to translate your brand values into a convincing brand experience that is more than a slick CRM tool or online retail interface. In a perfect world (or our idea of it anyhow) brands combine their physical presence with a positive digital experience, and thus make consumers share their values.

Cover photo: Rachael Voorhees/FlickrCC