Even in markets where the big 4 brands are not the only players they often have a dominant presence. The brands are very widely known amongst important client and stakeholder groups. They often have distinct connotations. These may not always be positive (for example if they are seen as slow moving and costly) but perceptions are important, and far preferable to having no image at all. Indeed an effective salesperson can take an opportunity by turning negative perceptions to their advantage by behaving differently. So for example, if Deloitte is seen as arrogant then they have the opportunity to be even more effective, when pitching for work, by being modest and receptive.

Relative brand value
The big 4 dominate the brand value of the top 10 accounting firms. PricewaterhouseCoopers, Deloitte, KPMG and Ernst & Young make up over three quarters of the UK brand value of the top 10 accounting firms. The chart demonstrates the huge gulf between the brand values of the big 4 accounting firms and the value of the 5th most valuable brand, BDO. The accounting firms in the next tier down are much smaller but also have powerful brands. Firms such as BDO, Baker Tilly and PKF have wide recognition and significant business presence in certain market segments. In fact BDO is punching above it weight in that its fee income is smaller than Grant Thornton but its brand value is higher.

What drives accounting firm value?
The huge value of the brands can be seen from the revenue the firms generate, the growth they achieve and the profits made. The recent growth has been impressive, with the "delicious irony" of the boom in work derived from compliance work required post Enron. Obviously it is not just the brands which drive this, there are other important factors such as client relationships and people.

I do not think the dependence of these business on their people is so great. There are relatively few instances of teams leaving the larger accounting firms and taking clients with them. Certainly not to the same extent seen in legal or investment banking markets. Indeed the opposite seems to be the case, that they can easily change the client team if they wish to.

The value of the accounting firm brands in the UK was indicated by merger activity when the London firm of BDO Binder Hamlyn merged with Arthur Andersen. Arthur Andersen's international brand was stronger than BDO's and so BDO became available in the UK. It was immediately snapped up by a firm just below them in the fee rankings, Stoy Hayward, and so its international brand Horwath, became available. This was soon taken by Clarke Whitehill and so on. The speed with which these brands were taken on by competitors just below them in the food chain indicates how valuable these brands clearly are.

In fact the brands are fundamentally important and would be extremely difficult to replace should that be necessary. It has been done, Accenture rebranded from Andersen Consulting, however when Arthur Andersen folded it was unable to start again with a new name. It fragmented and was forced to merge its business into other brands, such as Deloitte in the UK.

Benefits of the brand to the accounting firms
Initially the recognition of these brands means that the accounting firms are automatically considered for a pitch list for relevant business. There is an assumption of a certain level of knowledge and skill which they don't have to establish. It may not be sufficient for every project but it is a base level from which to work. The brand adds a certain imprimatur to the work, that it is of a certain standard. The brand means that they can charge a premium price for their services and make high levels of profits. I do not think the partners of these accounting firms could, on average, earn the amounts they do without the use of an accounting firm brand. Just look at the levels of brand values we have estimated for the top accounting firms, the largest being £3.9 billion for PricewaterhouseCoopers.

The brands bring other benefits to the firms too. In particular they attract good quality staff, they act as a focus for consistency of culture and team building. They have a good ability for extension into other business areas too. The accounting brands can be seen operating in many markets beyond their core competencies of accounting, audit tax and corporate recovery.

The future?
In some ways, the marketing of these accounting firm brands is still in its infancy compared with say the branding of FMCG brands. These brands, or successor brands will be around for years, barring further disasters like the collapse of Arthur Andersen. Maybe in years to come we will see PwC being marketed using methods like Coca Cola.