With the global financial markets in turmoil, valuations are on everyone’s mind these days: financial valuations, market caps, brand valuations, etc. Today, I read a great article about the burst of the “Brand Bubble” and the impact this will have on brand companies’ intangible assets. Brand valuation is a concept with broad corporate acceptance and many of us are quite familiar with it. However, I’d like to throw out a new valuation model called Social Capital Value Add (SCVA).
For the past month, I’ve been conversing with Michael Cayley about his new valuation model that goes beyond Brand Valuation and explores the value of Social Capital. There is a sociology truism that the strength of the network lies in its weakest ties. Corporations with consumer-facing brands need to start looking at, evaluating (hopefully, even financially valuing) and engaging with their Social Capital, especially as consumers become more powerful in the two-way Brand conversation.
We have not figured out all the exact details of the financial model for this new metric. But, I do know that a Social Capital Valuation Model will be important to the future growth of most companies and there are many companies already recognizing this, e.g. MTV, Dell, Procter & Gamble, Monster, Comcast, CNN and several others. I’m excited to be working with companies that recognize this fundamental shift in brand strategy and I’m also thrilled to be part of an emerging team of thought leaders figuring these issues out!
If you have any related thoughts, research or are simply interested in being part of this distributed, virtual think tank, do send me a note!