• by Sean Hargrave , Staff Writer, March 7, 2016

It's interesting when research backs up a hunch we have probably all been feeling. The latest research from Markables, the brand valuation specialists, suggests that the contribution brand value makes in valuing a company halved between 2005 to 2014 while the value of its customer relations has doubled. In other words, two of the major intangibles that go into valuing a company have swapped positions, and brand value has been replaced by customer experience.

Is that what the research is actually telling us? I would suggest that brand image is as strong as ever, but it has pretty much become customer service. The way you treat customers is effectively what your brand now represents. We're living in an age of huge digital disruption where brands that even Millennials are unlikely to have grown up with are now our first choice for most purchases. Amazon made ecommerce easy and PayPal has made paying for ecommerce simple, while Spotify and Netflix let us listen or view to almost whatever we want at a time that suits us. All of these companies have incredibly strong brands -- and to my mind, this is attributable to their customer experience. We don't walk into an Amazon store or a PayPal bank -- they are just there on our devices serving us in the most convenient manner possible. The proposition is the brand. 

And it's not just these newfangled digital companies that prove this. It has always been the case, only it has become more evident when a brand disrupts its industry and that new level of customer service becomes what they are associated with. 

I was talking with a CMO at a business airline that is well known in the UK. although perhaps not as much outside the UK or the EU. We had a conversation about loyalty points and airlines. I have to confess that I recently booked flights with loyalty points and so am a fan, at the moment. However, I've long wondered what my points actually meant. what could they be transferred into and when and how? The programme I was with was also changed, which left a nagging doubt that my points had been downgraded or at least made usable more at time when I didn't want to fly -- typically outside of school holidays.

Anyway, despite this rare enthusiasm which I had at the time, the business airline CMO pointed out that it doesn't run a points programme. It's not an oversight, but a tactical decision. It believes that the best way to engender loyalty isn't in points which nobody quite understands. Instead, they focus on small planes, a VIP-style service and ensuring they have been named the most punctual UK airline for several years running. Busy businesspeople want a great service and to know they will be on time. These are the things that ensure loyalty, not a vague promise of a night in a hotel or free weekend car hire five years down the line if they remember to produce a card every time they fly to collect points. 

So with the latest research suggesting that customer experience has doubled in importance when valuing a company, compared to brand value which has halved, I'd probably be the fly in the ointment saying it raises a good point. However, there's not really anything to pick between the two. Brand image is a mirror image of how you treat people. Customer experience is the value of the brand because it's not what you say you're going do do but actually what you deliver. And that's what customers remember way beyond the ad slogan or price deal that got them to bite in the first place.