A couple weeks ago an article by William Neal and Ron Strauss appeared in AMA’s Thought Leadership newsletter grappling with the idea of valuing brand equity. While their assertion that brand equity should be treated as a financial asset is right on, what’s tricky is how you go about measuring and presenting that value so you can effectively grow and sustain profit margins.  Properly valuing brand equity provides senior management with benchmarks for gauging how many dollars and how much staff bandwidth should be focused on increasing brand equity as opposed to basic product or service development and delivery.  

HNE, a health insurer whose brand is around being personal and accountable to employers and plan members, is better able to manage their brand asset because they don’t just measure its value to the company, they also measure how well they’re keeping their brand promise: 

1) The depth of customer relationships
2) Customer understanding of HNE’s promise (brand)
3) The comparative dollar value customers place on the HNE brand 

This allows management to fine tune their ‘brand sustainability engine’ with less likelihood of under- or over-investment in the brand. 

 –Joe LePla