Formal IP such as registered trademarks are easy for lenders to secure and therefore often form part of IP lending collateral. To maximize the value from this asset, there are actions that companies can take that can materially impact their brand score and ultimately the value attributed to brand.

In our experience, IPRSCORE’d companies that scored well in Brand had:

• a portfolio of registered trademarks that underpinned corporate and financially material product brands which represented formal collateral for lenders.

• captured rich transactional data that informed brand strategy, and enabled companies to perform customer analytics and foster sticky customer relationships that secured recurring revenue.

• achieved significant brand awareness and reputational benefit across multiple territories, which could widen the buyer pool and licensing opportunities, and ultimately increase value in M&A.

Companies looking to improve their IPRSCORETM and improve their collateral value for lenders could consider the following actions:  

• Trademark protection: Confirm the extent of the formal and registered IP that underpins the brand to ensure that your current and future investment in the brand is protected and that your trademark strategy aligns with your business strategy for growth. Focus on: the trademark classes in which a trademark is listed; the territories in which trademarks are registered; and, how much use has been made of the trademark in those classes and territories. It is also worth investigating if any parties are infringing the brand or passing off in those territories – if you are thinking about licensing out or selling a brand, infringement could be an indication of potential interest in the brand which you might leverage to maximize the price in such deals.

• Know your customer: Build your customer database and brand presence. This can add significant value, particularly if you collect rich transactional data that (i) enables you to perform customer analytics that inform marketing activities,  such as customer data, customer purchase behavior including sales volumes and price points / average purchase bundles and customer churn stats; and (ii) provides evidence of customer loyalty and/or recurring revenue to potential lenders that will be interested in future, predictable cash flows. Again, if you are thinking about licensing out or selling a brand, having access to customer insights and intelligence will likely positively influence the price in such deals.

• Register your domains: Brands have both online and offline recognition. The protection or registration of relevant domains associated with a brand will naturally underpin its value. In addition to natural searching strings for domains, consider including common misspellings of the brand, which again can add value to a brand both now or in the future when a sale might be completed. Also register domains and social media accounts for product brands as well as the corporate brand, just in case you spin out or sell those product brands in the future.

• Be visually consistent: Visual recognition can be a powerful tool in transforming a trademark into a valuable brand. Ensure that customers are exposed to consistent imagery related to the brand, including: logos, straplines, store fronts, window layouts, store layouts, online content and website pictures using clear brand guidelines. Consistent and recognizable store and window formats, which customers immediately associate with a brand, are often particularly important in the retail and hospitality sectors.

• Protect and enforce IP rights : Evidence of a company conducting trademark infringement enforcement activities to prevent copycats are likely to increase the value of a brand (underpinned by a registered trademark) and help protect profit margins generated by the brand. Furthermore, significant trademark infringement can also highlight different markets and territories where the brand could generate additional revenues for your business and potential licensing opportunities.

A registered trademark is, of course, a crucial element in the creation of brand value, but it is only one element of a brand. Committing to these simple brand-related activities can enhance the value of the brand and improve the IPRSCORETM, making brand assets valuable collateral for lenders.