New Research Seeks to Quantify the Link Between Brand and Enterprise Value
A new study by Bella Private Markets, WestCap, and Tracksuit adds to the limited research and quantitative analysis linking consumer brand strength metrics to valuation.
The study, “Is Brand Strength Linked to Firm Valuation? Evidence from Consumer Survey Data,” analyzes monthly brand strength data – from awareness, consideration, investigation, usage, to preference – against TEV for 21 publicly traded companies from December 2022 through April 2026.
“This is a surprisingly understudied area given its significance to how companies are built and valued,” said Josh Lerner, Jacob H. Schiff Professor at Harvard Business School and Managing Partner of Bella Private Markets. “What we are attempting to do is take what has historically been a very inexact science and approach it in a more systematic way.”
After controlling for various company-specific and time-specific factors, initial research findings suggest that:
- A 10 percentage point increase in brand awareness is associated with a ~17% increase in total enterprise value – equivalent to $170 million for every $1 billion of company value – a relationship that remains statistically significant across multiple model specifications
- A 10 percentage point increase in brand consideration is associated with a ~20% increase in total enterprise value, with consideration among the most robust individual predictors of TEV across all model specifications
- A 10 percentage point increase in brand preference is associated with a ~17% increase in total enterprise value, underscoring that brands actively chosen as the best in their category command a meaningful valuation premium
- Brands that successfully move consumers through the full funnel, from awareness through to consideration and preference, command the greatest valuation premium, suggesting that depth of consumer relationship is ultimately more predictive of enterprise value than breadth of reach alone
The findings have direct implications for how investors evaluate portfolio companies. For firms that embed operational and creative resources into their portfolios, the research provides a framework for understanding how brand-building activity may translate to enterprise value growth over time.
The teams at WestCap, Bella Private Markets and Tracksuit are exploring future studies that expand the scope and scale of this initial study, and welcome collaboration from additional data partners and academic institutions interested in advancing this research.
