There are a number of proprietary formulae for calculating the worth of a brand, and these are used by Interbrand and others to calculate the value of large, global brands in order to define the world's 'best' brands. The formulae almost always produce different results.

You can calculate the value of your own brand, though, quite easily by asking one of two questions.


  • How much would it cost to establish a new brand in the market if starting from scratch


  • What would be the damage to profits if buying customers could no longer distinguish my brand from its competitors, or lost all memory of their previous experiences with my brand?

The two questions should produce similar results. If they are wildly different, then there is a problem with your brand strategy.

If the cost to profits of losing your brand's distinctiveness, or of customers' losing their memories, is much greater than the cost of starting from scratch, the market you are in is ripe for someone to come along with a new brand which will significantly eat into your profits.

If the cost of starting from scratch is much greater than the cost of loss of distinctiveness would be, it means that your brand reputation is poor in comparison with the cost of doing business. This may not be your fault: if your brand is not particularly distinctive or memorable, and you are in a market which has a poor reputation, then your brand will suffer.