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FutureNow Post
Tuesday, Jul. 3, 2007 at 8:54 am

What’s The Value Of A Brand?

By Bryan Eisenberg
July 3rd, 2007

Hat tip to John Moore who pointed out a recent BusinessWeek article about the new science of reputation management.

A company’s reputation for being able to deliver growth, attract top talent, and avoid ethical mishaps can account for much of the 30%-to-70% gap between the book value of most companies and their market capitalizations. Reputation is a big reason Johnson & Johnson (JNJ ) trades at a much higher price-earnings ratio than Pfizer (PFE ), Procter & Gamble (PG ) than Unilever (UN ), and Exxon Mobil (XOM ) than Royal Dutch Shell (RDS ). And while the value of a reputation is vastly less tangible than property, revenue, or cash, more experts are arguing it is possible not only to quantify it but even to predict how image changes in specific areas will harm or hurt the share price.

The article illustrates the value of telling your brand’s story clearly and often. Too many companies keep this information hidden.

How effectively are you telling your stories in this era of transparency? Do you know when you’re telling the right story, from the right angle?

In an upcoming post, I’ll share with you what’s involved in creating a great story. In the meantime, you can get started by developing some characters.

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Comments (1)

  1. Bryan,

    The brand evaluation is not a determinist science. With different methods (the Goodwill multiple is one), you can find for the same brand a value more than ten time higher… Moreover the brand value depends on your industry, that why I always find strange to compare Coca Cola with Google or BMW, even if you consider the possible application fields.

    Besides I think that in the article, the point is not to tell a story but to tell a legend. Human beings and firms like to romanticize…

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Bryan Eisenberg, founder of FutureNow, is a professional marketing speaker and the co-author of New York Times and Wall Street Journal bestselling books Call to Action and Waiting For Your Cat to Bark and Always Be Testing. You can friend him on Facebook or Twitter.

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