Does customer experience create brand value?

Interbrand have released their annual top 100 brands, with Google the big mover. Standard top 10 players such as Coke, IBM, Microsoft, GE, McDonalds, and others are present. It perhaps goes without saying that financial brands have taken a thrashing recently - "Seven of the 10 top 50 brands that fell in value in the year to June were banks. Between them their names lost more than $10bn (£5.5bn) of their cachet, according to the annual Interbrand survey, which uses future income estimates, the role of the brand and overall customer loyalty assessments to build its league table."

(In Australia - from SMH.com.au: "In Australia, the impact on brand valuations from the global economic fallout is less clear as Brand Finance revised only the top 100 global brands. In its earlier report, released mid year, Brand Finance put National Australia Bank's brand portfolio at the top of its league table for this year with a value of $6.4 billion although the company says NAB would have already lost it top spot to the No. 2 player, Woolworths. It has an "unrevised" brand valuation of $6 billion for this year.

"There is a flight to quality and to brands people can trust," Mr Haigh said. "Branding as a general issue is far more important right now. Brands are not just logos. They stand for value systems and one of the reasons the financial brands have gone haywire is they've thrown away their historic principles." Has this happened to your customer experience too? Or are they both interrelated anyway?)

Criteria for selection and calculation:

• There must be substantial publicly available financial data
  
• The brand must have at least one-third of revenues outside of its country-of-origin
  
• The brand must be a market-facing brand
  
• The Economic Value Added (EVA) must be positive
  
• The brand must not have a purely B2B single audience with no wider public profile and awareness

Of course we can then have the debate about how customer experience contributes to brands. These kinds of evaluations are purely business exercises that I think would have few similarities to what customers would rank as their favourites. Do many customers think Coke is really their favourite brand? Or that Microsoft is cooler or more valuable than Apple (is it about trust, reliability over cool, eclecticism?) Or is it that these brands prove their worth as market leaders in their particular segment or industry ... just thoughts. Have these brands created actual brilliant customer experience, or the perception of the same thing?


Also note very few of the brands are service brands. The obvious explanation is that products are easier to distribute consistently across the globe, whereas a service business is harder to replicate - all it takes is for one of your customer facing staff to have a bad day, and the customers that person interacts with are affected. But so are those customers who interact with support and retail staff of products like IBM computers, Nokia phones, Toyota cars.


The value of these brands, with the always exceptional Google, is about heritage, being established, and dominating their category consistently over decades, both as a customer serving and industry leading business.