How ‘brand value’ influences revenue

Brand value is the financial worth of a company. It influences the revenue of certain businesses and markets and corresponds to customers’ awareness of a good brand. It keeps the cycle of business in motion and needs to be constantly maintained or enhanced.

Entrepreneurs are ready to spend millions of dollars on building brand awareness to make customers recognise their brands and purchase from them. Hence, brand value influences the revenue of certain companies and markets.

If customers appreciate one particular brand and often buy its goods, this company usually obtains a higher ROI (return on investment). Moreover, if brands within a market have high customer loyalty, this can discourage new companies from entering such a market and increase the existing firms’ market share.

Brands are intangible assets, yet they carry financial value. That’s why knowing brand value is essential when we talk about investments and whether stakeholders should consider them. Companies need to pay attention to brand equity (what consumers think about a certain brand and how they perceive it) to raise their brand value.

Brand Value and Brand Equity

These two concepts are crucial for every business, yet they are sometimes misinterpreted.

Brand value can be defined as a cost of a particular company. Business owners should calculate how much it costs in the market to find this measure. Simply put, it is how much money someone would pay to purchase a particular business.

This metric helps to be aware of the directional changes, namely whether a company is gaining value or losing it. With this information in mind, entrepreneurs can decide to change their strategy or improve their marketing campaigns.

Each company has to raise brand equity to improve brand value. Let’s take Tide, for example. This brand of laundry detergent is more famous than other smaller companies. The money Tide invested into marketing, creating brand awareness, and customer loyalty enables the company to increase revenues significantly.

Brand equity is the value a business obtains from its name and recognition. Brands should provide their customers with products of superior quality that are easy to recognise and memorable to create this value. As a result, although consumers can purchase such products from competitors at a lower cost, they are ready to pay higher prices. Customers do it because they want to buy goods or services from brands they love, trust, and admire.

Brand equity, therefore, consists of consumer perception, negative or positive effects, and the resulting value. It influences the sales volume of a certain brand and its profitability.