On the sell side
You want your brand value to be as high as you can get it. Most brands are pretty weak. Improving things will require an upfront investment in a brand strategy and then a “germination” period to let the strategy take seed and grow into value. It doesn’t happen overnight. So, if you want to sell right now, you’re out of luck. How much time will it take? That depends on what the brand asset is: a business, a product, a service, an event, a campaign, etc. It also depends what market sector the asset is in.
But let’s say you want to sell a middle-market B2B business. A good rule of thumb is six to nine months for doing the R&D and working out the brand strategy. Then you’ll need three to five more months (on average) to develop the storytelling tools: visual identity, website, apps, packaging, advertising, trade show booth, brochures, etc. Finally, and this is the unvarnished truth that breaks hearts: Once you launch your new brand strategy, it will take anywhere from two to four years for it to take full effect and bring your that additional brand value. The good news is, usually, things move a little faster in a B2C situation.
The time it takes to establish a symbiotic relationship with a market is just one more reason why market leaders, in every market category, are downright militant about keeping their brands strong. They don’t want to be caught short if an irresistible deal comes along.
On the buy side
Remember, most brands are weak. So when the aforementioned B2B company comes on the market, the seller has probably not taken the above recommended actions to maximize brand value. You, as a potential buyer, must determine just how weak the brand is. How strong are its bond to its customers? How does it compare with its competition? These sorts of observations will go a long way in negotiating a lower price.
Here’s a real red flag. You discover the seller has invested in a brand strategy. For all intents and purposes, the brand looks strong. Its website is far superior to the competition. Its marketing is integrated, clear and effective. But you learn the brand strategy was launched just in the last year. This could be a case of the seller desperately putting lipstick on a pig. You have no way of telling whether this young brand strategy will gel. Again, only time will tell and you should negotiate your price accordingly.
But let’s imagine you’ve agreed on a purchase price for a very weak brand asset. Pause before you pull the trigger. First, you need to make a judgement call on whether, after the buy, you’ll be positioned to make the investment in the brand strategy yourself. After all, you don’t want to make the same mistake as the previous owner, who had to settle for a lower price. Will you still have the cash and the time to build the brand? If you make the investment yourself, you’ll want to enjoy the ROI. And what is that return?
- Improved sales
- More opportunities for growth
- Lower marketing and HR costs
- A happier, more motivated workforce
- Devoted customers who resist all efforts to lure them away
- Premium pricing and price resiliency
- Better strategic decision making
- Last, but certainly not least – Higher market value
It’s an old story, really. If you don’t invest, you’ll never see ROI. Buyer or seller – the one who invests and takes the time to nurture the brand’s growth will reap the rewards.
Best Branding Reads – Week of August 7, 2017
Spread Too Thin: Under Armour's Marketing Dilemma
Under Armour has figured out that focus and simplicity are key to building a strong brand.
What Every Brand Needs To Connect Better With Audiences Right Now
Remember, the stronger your bond with your market, the stronger and more valuable your brand.
The Potential and Peril of Giving a Brand a Human Face
A brand character can be effective. It can also turn out to be disastrous.
How Brands Can Convert Noise To Signal
This is a must read for any owner or manager of a brand asset
Building Modern Brand Experiences Through Smell
The scented environment is not just for bakeries and coffee shops anymore.
Brands That Know Who They Are Can Be Fearless
KFC points the way toward courageous marketing.
Weight Watchers Keeps Gaining (Because, Well, Oprah)
Celebrity endorsers work well if it’s the right fit. And, with Oprah, Weight Watchers has found the right fit.