How To Protect Your Company's Intangible AssetsSunday, February 14, 2021
What do the following companies have in common: Disneyworld, Coca-Cola, and Toyota?
If you answered “brand recognition”, you are correct. These companies, though different as chalk from cheese in what they do all have brand equity, a marketing term that describes a company's value, as determined by the consumer's perception of it, or his or her experience with, the brand. For someone who has never gone to Disney, their perception of Disney is that it is the “happiest place on earth”. If someone has never experienced a Coca-Cola, it would not matter because subliminally they'd think that in doing so the outcome would be a good-time experience derived when they “taste the feeling”. To further solidify the power of brand recognition even if one does not yet own a car or truck, the brand Toyota inspires innate feelings of confidence and reliability. People perceive that Toyota l provides reasonably priced comfort and safety that allows for customers to “go places”.
Brand recognition is more than merely their catchy taglines. All of these brands speak to the promise of an enjoyable customer experience; it's about the brands delivering on their promises and meeting customer expectations.
In short, the public believes them.
If you own a small business you might be inspired by the stories behind these brands, which all started off innocuously and over time, became household names. It is important to note that brand equity comes under a category of assets known as intangible assets; which are assets that can't be felt or touched but are nevertheless important for their business to thrive. Intangible assists don't physically exist, but have value simply because they have the potential to become revenue earners even if that revenue is difficult to measure in strict financial terms. Intangible assets include software, patents, databases, copyright and trademark, franchises, goodwill, and brand value or equity.
A company's tangible assets are ultimately easier to recognise because of their chiefly physical and visible attributes: land, buildings, computer equipment, machinery, furniture, vehicles, securities like stocks, bonds and cash, and so forth. Unlike its intangible assets, these assets are easily valued and therefore can be used as collateral, their value adding to the current market value of the organisation. Whilst these assets are essential to carrying out business activities, it is the company's intangible assets that often get overlooked. Yet intangible assets will impact a business' longevity, due to the name and reputation it has made for itself within the industry.
A business owner might find implementing measures to the safeguard his/her physical assets easier to do. Physical assets after al are just easier to manage. Take Toyota as an example:
1) You can properly and adequately insure the delivery of the motor vehicles
2) You can make decisions about the experience levels of the drivers and
3) Investment in the security for where the vehicles will be parked.
But how do you safeguard, goodwill and reputation you're trying to build for your company?
Asset management, especially these days, involves so much more than taking care of your company's infrastructure and physical equipment. Today, the market is increasingly putting more emphasis on the overall value of an organisation. In these socially distant, contactless pick-up pandemic days, let us say you have a small food business, the bigger, more established, food chains operating locally are now providing delivery service and in order to compete you might have to do so, too. Brand equity helps you to be competitive; the larger companies have already built goodwill with the public, and should there be a mishap, like a mix-up with an order, they may be forgiven. A small venture may not be afforded the same latitude, so they have to compete by offering discounts to show contrition and an understanding that the customer's patronage is important to them.
As the business owner, you must put in place systems and procedures that guarantee satisfaction among your growing customer base. Good customer service is the bedrock for goodwill, which will eventually blossom to become brand recognition, thus providing additional value and more customers. Too often in this country, a business opens that is full of potential, but is then quickly ruined because of rude staff, product inconsistency, and a general lack of understanding that the customer's experience at the establishment is critical. Word-of-mouth endorsement can go further than your advertising budget.
The sustainability of your business' brand equity also comes about through your social policies and charitable causes. No business is too small to consider this type of equity. It's the small gestures that will make a big difference. For example, you own a small restaurant operating in a depressed area. Commit to donating a few lunches to some of the neediest families in the community. Should your business have the physical space, you could provide an area for some of the neighbourhood kids to do their homework each afternoon. Opportunities are there to build your reputation within the community if you only look; you might never become as big a chain as Burger King, but right where you are, you can still inspire customer loyalty.
Building brand equity and loyalty is one thing: however, maintaining it is another.
Your small business is a building block to establishing generational wealth. Secure your family's future, and yours, by safeguarding its reputation.
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