How I Evaluate Brand Strength in Acquisitions

When I buy a business, I know that brand strength is one of the most important intangible assets I need to evaluate. Over time, I’ve learned that a strong brand can be more valuable than equipment, property, or even customer contracts. A weak brand, on the other hand, can drag down everything else, no matter how good the numbers look on paper.

Brand strength is about more than a logo or a tagline. It’s about reputation, recognition, and trust in the market. Customers buy because they believe in a brand, and employees stay because they’re proud to work under it. That’s why I always study brand strength as carefully as I study financials.

Why Brand Strength Matters

Brand strength matters because it:

• Increases pricing power by making customers less price-sensitive
• Builds customer loyalty and repeat business
• Creates competitive moats by differentiating the company
• Supports recruiting and employee retention
• Enhances transferable value because reputation outlasts ownership

A company with strong brand equity can survive downturns, expand faster, and command higher valuations.

My Early Mistakes

In one acquisition, I assumed the brand was strong because it had been around for 20 years. After closing, I realized my reputation had quietly eroded. Customers associated the brand with poor service, and rebuilding trust took years.

In another case, I underestimated how powerful the brand actually was. I thought growth was due to marketing spend, but in reality, customers were loyal to the brand itself. I nearly undervalued the deal because I didn’t recognize that equity.

Both experiences taught me to evaluate brand strength rigorously.

How I Evaluate Brand Strength

During diligence, I look at:

• Customer Perception: What do reviews, surveys, and testimonials say?
• Market Awareness: Do people recognize the brand in its industry or region?
• Reputation History: Has the brand been consistent or has it suffered hits?
• Competitive Positioning: Does the brand stand out or blend in?
• Employee Pride: Do staff identify positively with the brand?

These factors tell me whether the brand is an asset or a liability.

Signs of Strong Brand Strength

• Customers willingly pay a premium
• High repeat purchase rates
• Consistently positive online reputation
• Recognition beyond the immediate customer base
• Employees proudly wear the brand identity

Signs of Weak Brand Strength

• Customers switch easily to competitors
• Low or no differentiation in the market
• Negative reviews and weak reputation
• Declining brand recognition
• Employees are disengaged or indifferent to brand identity

How I Strengthen Brand Post-Acquisition

If I buy a business with weak or average branding, I:

• Rebuild reputation by focusing on customer experience
• Invest in rebranding or refreshing identity if needed
• Launch marketing campaigns to highlight differentiation
• Engage employees to connect with brand values
• Monitor reputation actively and respond quickly to feedback

Why Brand Strength Impacts Valuation

Businesses with strong brand equity command higher multiples because they’re more resilient and easier to scale. Weak brands require heavy investment, which lowers valuation.

Final Thoughts

I’ve learned that brand strength is one of the most important and overlooked factors in acquisitions. It drives customer loyalty, pricing power, and long-term growth.

That’s why I evaluate reputation, recognition, and perception before buying and invest in strengthening branding after closing. Because at the end of the day, assets depreciate, but strong brands appreciate.

I continue sharing my acquisition playbook and strategies at DrConnorRobertson.com, where I break down how I evaluate and build brand equity in small business deals.