ISO 20671 (Part 1: Principles and fundamentals) is an international standard that defines the foundations and principles for brand valuation. This standard provides an integrated framework for assessing the strength, perceived and market value of a brand. Any organization, whether private or public, can use this framework for internal or external brand valuation. The standard does not only aim to estimate financial value (which is covered by ISO 10668), but focuses primarily on measuring the effectiveness of the brand and how to build and maintain its value.
The basic principles of brand valuation according to the standard:
The brand valuation system relies on several key governance principles to ensure the credibility and comparability of the results, including
- Transparency: The evaluation process and methodology must be clear and documented to everyone.
- Consistency: The same principles and methodologies must be applied consistently when the evaluation process is repeated between different time periods.
- Objectivity: The evaluation must be based on robust and reliable evidence and data, free from personal bias.
- General principles: The evaluation should be linked to the organization’s strategic goals and decisions.
Integrated Brand Assessment Framework:
ISO 20671 provides an integrated framework that links the input elements to the final dimensions that lead to the evaluation of the brand.
First:Input Elements: These are the factors that are invested in to develop the brand:
- Tangible elements: Such as financial resources and facilities.
- Quality elements: These relate to the quality of the product or service provided.
- Innovation elements: Related to the ability to innovate and develop.
- Intangible assets: Such as patents and registered trademarks (legally).
Second:Output Dimensions: These are the dimensions that are used to measure the strength of the mark and its impact on the market:
- The legal dimension: Related to the protection of the mark and intellectual property rights.
- Customers and Stakeholders dimension: Related to awareness, loyalty, reputation, and perceived service quality.
- The market dimension: Relating to the brand’s position in the market and its competitive share.
- Financial dimension: Measures the financial performance resulting from the strength of the brand.
Development Experts’ methodology for ISO 20671implementation
We enable organizations to use ISO 20671 to proactively managethe brand, not just evaluate it. Our work is centered on a specific methodology aimed at transforming assessment results into strategic decisions.
1. Analyze legal and regulatory requirements
Our methodology begins with a thorough review of the brand’s inputs, especially the legal dimensions. We ensure that brand elements, such as logos and names, are fully protected and comply with relevant legal requirements, establishing a strong foundation for value assessment.
2. Building a consistent and objective valuation model
We design a customized valuation framework that applies the principles of consistency, objectivity and transparency emphasized by the standard. This includes identifying key indicators to measure brand strength in the customer and market dimensions, using advanced research tools to measure awareness, loyalty, and image.
3. Linking Cognitive Strength to Financial Results
We help the organization understand the relationship between the inputs it invests in (such as product and service quality) and the final financial results. This is done by analyzing the impact of brand power on financial performance, providing a solid foundation for determining brand value and setting ROI targets.
4. Periodic evaluation and continuous improvement loop
We establish a system of periodic brand evaluation (at least annually), as recommended by the standard. This periodic evaluation serves as a feedbackloop for continuous improvement, allowing the organization to change and adjust its investment strategies in brand development to ensure that more value is achieved in the long term.
Benefits of implementing ISO 20671
The implementation of this standard ensures that the brand is managed as avaluableasset, leading to multiple strategic and financial benefits:
- Enhanced organizational value: Increases the overall value of the organization through proactive brand management.
- Support strategic decisions: Provides accurate and reliable data to makestrategic decisions about expansion, repositioning, or investment.
- Attract investors and funders: Organizations can use valuation results as evidence of the importance of the brand as a financial asset when negotiating with investors or lenders.
- Improve competitive performance: Understanding a brand’s strengths and weaknesses in comparison to competitors can help enhance competitive reputation in the marketplace.
- Increase profitability and improve yield: Regular evaluation creates a continuous improvement loop that increases the efficiency of marketing spend, thereby improving financial returns.
