Myth and math

Can you really capture a brand's success using metrics alone? Columnist Will Novosedlik considers the methodology behind Interbrand's Top 25 list.

How do you measure the intangible aspects of a brand? This is the question I ask myself as I pore over the results of Interbrand’s survey of the top Canadian brands for 2010.
The measuring stick in this survey is financial value, based on a methodology comprised of three steps: analysis of the brand’s market, its management and its strength; analysis of the brand’s earnings, isolating those attributable to the brand itself; and the application of a multiple to brand earnings, based on the quality of the brand.
Interbrand conducts a financial analysis to determine the revenue that the brand alone generates, then a non-financial brand strength analysis is added to arrive at brand value, which is defined as ‘a financial representation of the business’s earnings due to the superior demand created for its products and services through the strength of its brand.’
The formula used is a mix of math and myth (in this case, I use the word ‘myth’ respectfully as an indicator of the more intangible aspects of brand). As an example of how brands mix the two, look at A&W, one of the winners of strategy’s Brand of the Year. A&W enjoys what I would call ‘mythic’ stature among a certain demographic (i.e., Boomers) because they remember it from their teen years as a place where you could drive up in your car and be waited on where you parked. The products (Papa Burger, Mama Burger and Teen Burger) have been successfully revived in a wave of nostalgia that I assume A&W’s owner can take to the bank.
Interbrand’s list of Canada’s Top 25 ranked by brand value is predictably populated by the biggest brands we have. Top of the list is Thomson Reuters, with a brand value of $9.4 billion. Number 25 is La Senza, with a brand value of $282 million. Given the financial focus of Interbrand’s methodology, though, are there brands that enjoy exceptional strength but do not make the cut?
Using Interbrand’s indicators, I would say one of those is Four Seasons. The iconic luxury hotel management brand, now 50 years in the making, was included in the 30th-anniversary issue of the Robb Report, which celebrated ‘the most exclusive brands of all time.’ It made a list of ’20 celebrated icons and innovators who define excellence’ – including Rolls-Royce, Ferrari, Cartier, Tiffany, Louis Vuitton, Armani, Glenlivet and Château Lafite Rothschild. Exalted company.
It’s likely the eminent hotelier is not on the Interbrand list because it is privately held in foreign hands. Barring the lack of publicly available financial information, it’s interesting to run the Four Seasons through the gamut of Interbrand’s brand strength indicators, which are:
• Quality and brand experience
• Distinctiveness of
its proposition
• Relevance to the customers
it serves
• Capacity to deliver the promised brand experience
• Ability to evolve and lead within its category
• Positive buzz it enjoys in the media and among consumers
• Level of importance the organization places on brand
• Consistency across all its touchpoints
On the quality front, no question: it is what the Four Seasons is known for. But then, no quality, no claim to luxury, so that one’s table stakes. Distinctiveness of its proposition? In a category populated by names like Raffles and Ritz-Carlton this is a tough one to own. While the Four Seasons topped the 2009 JD Power North America Hotel Guest Satisfaction Index Study, the Ritz-Carlton topped it in 2010. It’s like Nadal vs. Djokovic – two stars battling each other at the top of their game.
Price may help here. By comparison, the presidential suite at the Ritz-Carlton Washington, D.C. is $5,800 a night, $12K at the Raffles Dubai and $30K at the Four Seasons New York. There’s gotta be myth behind the Four Seasons math. Again, I mean that in a good way.
Positive buzz among media and customers? Four Seasons has certainly managed to do that through everything from $30K-a-night stories to sponsorship of cultural events and landmarks to significant philanthropic work.
How about relevance to the customers it serves? If we’re talking the highest end of demographics, then the Four Seasons is superbly relevant. What about capacity to deliver the brand experience, category leadership and consistency across all touchpoints? The hotel chain counts quality and service as two of its four strategic pillars. And service culture as its third. The JD Power rankings seem to suggest they’re not kidding.
The best demonstration of the importance it places on brand was its decision to transform into a management company. That’s betting the farm on reputation and goodwill. It paid off in the sale of a majority stake to Bill Gates and Saudi Prince Alwaleed.
As a brand, I’d say it more than makes the grade. But even if it did get on the list, I’d still be wondering about that myth part. There are other iconic names there that boast a storied brand mythology. You can intuit that these myths are a big part of those brands. But will there ever be a metric to capture it? You decide.

Will Novosedlik is VP brand and communications at Wind Mobile. He can be reached at novosedlik@gmail.com