Latest / The CMO Podcast with Fexingo: Marketing Leadership, Budgets, and Executive Strategy / How CMOs Price the Unpriced Brand
Transcript
- Lucas: So Luna, you've been in the room when a CFO asks that question that makes every marketer squirm: so what's the brand actually worth? Luna: Oh, every time. And I've never had a good answer. I mean, we'd throw around terms like brand equity, but it felt more like a vibe than a number. Lucas: Exactly. That's the gap that brand valuation is supposed to fill. And it's having a real moment. You've got Interbrand's annual ranking, and more importantly, you have CFOs who are starting to treat intangible assets like patents and trademarks as actual balance sheet items. Luna: Right. And I remember you mentioned a B2B software company that used a valuation to win more budget. That's the kind of story I want to hear. Lucas: Yeah, this was a mid-size company, about three hundred million in revenue. The CMO, let's call her Sarah, was frustrated. She kept pitching brand campaigns, and the CFO kept asking for the ROI. Not the campaign ROI — the ROI on the brand itself. So she commissioned a third-party valuation. Cost her about fifty thousand dollars. And it paid for itself in one meeting. Luna: Fifty grand for a number? What did it actually tell her? Lucas: Well, the valuation came in at about one point two billion dollars. That's four times revenue, and it was largely driven by brand. The methodology blends a few things: financial forecasts, the role of brand in purchase decisions, and something they call brand strength — which covers things like loyalty, awareness, and competitive advantage. It's not perfect, but it gives you a defensible number. Luna: And that number changed the conversation with the CFO? Lucas: It did. Because suddenly the brand wasn't a cost center. It was an asset worth one point two billion. Sarah could say, look, we're investing fifteen million in marketing, but the asset it protects and grows is worth a thousand times that. A small percentage change in that value dwarfs the marketing spend. The CFO had no rebuttal because he'd helped sign off on the methodology. Luna: That's clever. Getting the CFO to validate the method before you share the result. Lucas: Exactly. And she didn't stop there. She used the valuation to reallocate budget, shifting from short-term performance ads to brand-building, because the model showed that a two-point increase in brand strength would add a hundred million in value. That's a much easier pitch than 'trust me, brand matters.' Luna: But isn't there a risk? I mean, you're letting an external firm put a number on something as fuzzy as brand. How do you know it's not just a made-up figure to justify your own job? Lucas: That's the right challenge. And honestly, the methodology has its critics. You're blending subjective judgments with financial models, and the output can vary widely depending on who you hire. But the point isn't the absolute number. It's the conversation it enables. When you have a valuation, you can talk about brand in the language of the boardroom: value, risk, return. Luna: So it's more of a communication tool than a precise measurement? Lucas: Precisely. And that's a useful way to think about it. You're not claiming to know the exact value of your brand, but you're saying here's a credible, third-party estimate, and here's what it means for our business decisions. That's a much stronger position than saying brand is priceless. Because priceless, to a CFO, sounds like a black hole. Luna: It's funny you say that, because I was reading about a consumer goods company that did the opposite. They refused to put a dollar figure on their brand, because they felt it was reductive. And their board basically said, if you can't measure it, you can't manage it. So they ended up cutting the brand team's budget. Lucas: And that's the cautionary tale. You can't sit out the measurement game. If you don't engage with brand valuation, you're ceding the argument to people who will assign a value of zero to your work. That's the worst outcome. Luna: Okay, so I'm a CMO and I want to do this. What's the first step? Do I need to hire Interbrand or can I do it in-house? Lucas: You don't need the big names. There are specialized boutiques that do this for a fraction of the cost. But the key is to understand the methodology, so you can ask the right questions. You want to know what assumptions they're making about your growth rate, your market share, your customer loyalty. And you want to see a breakdown of how they arrived at the number, not just a single figure. Luna: And you mentioned it cost fifty thousand for that company. Is that typical? Lucas: It can range from twenty thousand to well over a hundred. But you can also do a lighter-touch version internally, using a framework like brand contribution or customer equity. It won't have the same credibility, but it's a starting point. The important thing is to get comfortable with the concept, so you can speak the language when the CFO asks. Luna: So, the next time I'm in that meeting and the CFO asks what the brand is worth, I can say, 'Let me show you.' Lucas: Exactly. And that's a whole different meeting than the one you'd have otherwise. You're no longer being defensive. You're bringing an asset to the table. Luna: I like that. Speaking of bringing things to the table, I've been meaning to say — I love that we keep these conversations free for anyone to listen. No ads, no paywall. Lucas: Yeah, that's a choice we make deliberately. We want these episodes to be useful, not interrupted. And if you're someone who's gotten value from what we're discussing, you can support that choice at buy me a coffee dot com slash fexingo. It's an easy way to keep this going. Luna: Yeah, every little bit helps. But let's get back to Sarah. She got her budget increase, but how did she make sure the valuation didn't become a one-time thing? Lucas: That's the next challenge. She made it an annual ritual. Every year, she updates the valuation with a fresh financial forecast and refreshed brand strength metrics. That way, the CFO sees the number moving, and she can tie changes directly to her marketing initiatives. It turns brand from a static argument into a dynamic metric. Luna: And those movements — are they actually caused by marketing? I mean, brand value can go up because the economy is booming, or a competitor stumbles. How do you isolate the effect? Lucas: You can't perfectly. But the model breaks down brand strength into components, some of which are more directly influenced by marketing, like awareness and loyalty. You can track those components quarter over quarter and see which marketing activities are moving the needle. It's not causal proof, but it's directional evidence, which is more than most marketing has. Luna: So it's about building a better narrative, not perfect measurement. Lucas: Right. And that narrative is powerful. In Sarah's case, she didn't just get more budget. She got a seat at the strategy table. Because when you're talking about a one-point-two-billion-dollar asset, the board wants to know how you're protecting it. That's a conversation about risk, about competitive moats, about long-term planning. It's much more interesting than click-through rates. Luna: I bet. So for the listener who's a CMO or a VP of marketing, what's the one takeaway you'd leave them with? Lucas: Don't wait for the CFO to ask. Commission a brand valuation, or at least build an internal model, before you need it. Having a defensible number in your back pocket changes the dynamic. It's proactive, not reactive. And it shows you're thinking like a business leader, not just a marketer. Luna: And that's the kind of leadership that gets you promoted. Thanks, Lucas. That was genuinely useful. Lucas: Anytime. And if you want to dive deeper into the methodology, we'll put some resources in the show notes. For now, I'm curious — how many of you listening have actually used a brand valuation? I'd love to hear your stories. You can find us on LinkedIn or the Fexingo community.