On completion of a brand acquisition, the ongoing brand health is a key consideration. The consumer relationship is frequently with the brand rather than its owner so ensuring the health of the brand is critical to protecting future cash flows.
Intangible Business does this by developing a brand equity scorecard to track the value of the brand over time. This brand value tracker uses both historical performance and future trends to forecast future cash flows. Key performance indicators are measured, including sales in total and by channel, gross margin in total and by channel, brand investment and Net Brand Contribution (NBC) by channel and core customer sale. Monitoring brand value can protect the owner from unwelcome changes as it anticipates future events. Changes in brand health can then be corrected more easily or action taken to prevent value loss.
This is of particular relevance for supporting exit strategies. The brand value tracker can identify the optimum time for exit through trade sale or stock exchange listing. Monitoring brand value is useful for either strategy. For a trade sale it demonstrates to potential new owners the health of the brand and for a flotation, the financial reporting requirements will be easier to comply with as Intangible Business's methodologies are compliant with IFRS and US GAAP standards.