There are many firms that evaluate the commercial worth of businesses. Senior management turns to these firms for a variety of reasons: partnership disputes, regulatory reporting or establishing fair market value, to name just three. These firms use a variety of tools and formulas to assign monetary value to tangible property like equipment, real estate, inventory and every other thing that a business may own. They also account for the value of intangibles like intellectual property, i.e, copyrights, patents and trademarks. But very few of these firms really specialize in intellectual property valuations. Many underestimate brand value because they don’t completely understand what a brand really is and where its full potential lies. One firm that does specialize in precise evaluations of intellectual property (IP) is San Diego-based Nevium. Brandtalk had the recent pleasure of talking to Brian Buss, co-founder and principal of Nevium, about its unique brand assessment rubric, the Nevium Brand Score Tool. What follows are the salient points of our conversation, lightly edited for length.
Brian Buss is a Chartered Financial Analyst (CFA) with experience in corporate finance project management and financial analysis both in the US and in international markets. He is a frequent speaker, presenter and expert witness on topics including Brand Valuation, Intellectual Property Damages and Profit Apportionment. Brian has a bachelor’s degree in Biology and Economics from Claremont McKenna College and an MBA from San Diego State University. He co-founded Nevium in 2012.
Brian, what, precisely, is the Nevium Brand Score Tool?
The Brand Score Tool is a framework to collect and organize analytic observations about Brand Assets. We use this tool or framework to convert the available brand observations to a quantitative measure. In the past we found there exists a large variety of metrics and measures related to brands. We wanted one tool to combine all the observed metrics into one score. This framework allows our team to compare brands against other brands and to compare a single brand over time. The single score empowers comparability and consistency in our brand asset valuations.
The tool measures brands against 16 distinct metrics. What are they?
The 16 metrics are the observations we see applied in the process of brand analysis, evaluation and valuation. The metrics include observation areas such as brand history and consistent use; financial performance measures, opportunity measures and market presence measures. The observations are intended to be observable from outside an organization, allowing users of the Brand Score Tool to apply this framework to both brands they own or manage and brands used by comparable or competitive companies.
Does this tool give owners/managers of brands the dollar value of their IP?
The framework itself leads the brand analyst to develop a score opinion for a brand. This is a step in the process of developing a brand valuation opinions but does not provide a dollar value for IP or brand assets.
When valuing Brand Assets, it is often a challenge to develop and apply a consistent framework for evaluating the subject assets. The Brand Score Tool was developed so our team at Nevium could consistently gather and apply a consistent set of metrics for the brand analysis and evaluation. We need to complete the evaluation before we measure the financial benefits of brand ownership.
The Brand Score Tool is an Evaluation tool. A brand Valuation opinion is the process of forecasting and measuring the present value of economic benefits that will accrue to users of the brand assets. In order to forecast and measure those economic benefits we incorporate the output of the Brand Score Tool.
Why should brand owners/managers know their Nevium Brand Score?
The Brand Score Tool promotes consistent evaluation of brand assets. One challenge in valuing brand and intangible assets is the ability to consistently convert observations into quantitative opinions. This framework provides our team a consistent framework for evaluating brand assets. It can provide the same consistent analytical framework for Brand Owners.
I recommend applying the framework to your organizations key corporate or product brands once a year. The annual process will provide a deeper understanding of the relative strengths and weaknesses of brand assets as well as changes to those strengths and weaknesses over time.
As the 16 measures can be analyzed using public information, brand owners can also use this Tool to compare their own brands to those of their peers and competitors.
What will knowing it give them power to do?
Applying consistent analytical methodologies fosters consistent results. Consistent results prevent the “Apples v. Oranges” issues encountered when an analysis is not conducted consistently. When the analysis is consistent over time, or consistent when comparing different brands, the opinions developed from the analysis are more reliable and more actionable.
Therefore, the Nevium Brand Score Tool should give brand owners and managers the power to evaluation their own assets, uncover areas for improvement and build better, more valuable brands.
Where can interested parties download a sample Nevium Brand Score Tool?
The framework can be downloaded from our website, www.nevium.com. There is a PDF file with the 16 metrics, grouped by dimension. On our Nevium site, navigate to “resources” on the top menu bar, select “tool kit” then select “Brand Score Tool.” The link is here: Nevium Brand Score Tool – Nevium IP Solutions
Honestly, this conversation with Brian Buss of Nevium could have gone on for hours. Blogs with short-form posts, like this one, don’t lend themselves to examining the kind of complex work Nevium does in determining the fair market value of IP assets. Neither can we do justice to all the work they do in providing expert opinions in legal proceedings. But I did want Brandtalk readers to know about their Brand Score Tool. Since it’s a tool you can use yourself, why not download it and put your brand to the test? For even better results, have your key advisors, either on staff or outsourced, each use it to score your brand. Then come together and compare results. Wherever there is a discrepancy, there is a valuable conversation to be had.Or, for those of you who might not have time or inclination to do it yourself, contact me about having us do a Boardwalk brand audit for you. We offer several options and we’ll happily include the Nevium Brand Score Tool to any of them.
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