The royalty rate corresponds to the value of the “loan” for use of the brand . In other words, it is the cost that someone must pay to use it commercially, even though it is not a licensing agreement. This value is usually a percentage of the revenue.
This is an alternative widely used by franchises. In this model, the concession fee is paid by the franchisees, who benefit from the prior recognition of the brand. If your business is a franchisor, it is international mailing list possible to make a calculation based on this information. You just need to know the average revenue of the franchisees to understand the impact of the brand.
If the business does not have this operation, no problem. It is possible to simulate the collection of royalties, to understand brand equity , in addition to carrying out benchmarking and using values from franchisor competitors, for example.
However, it is essential to consider other variables, such as the location of points or market conditions. In this case, the measurement is indirect and not precise, but it can help in the general analysis.
Customer loyalty
Loyalty is one of the measures of success for any business . In a quantitative analysis, it is cheaper to convert a customer who has already purchased from your business previously. Therefore, an increase in customer retention also increases profitability and the chance of revenue.
There is also the possibility of establishing recurring income . This is essential, especially in subscription-based businesses. After all, it increases the customer's lifetime value (LTV), as well as providing more predictability and security for finances.
In addition, there are qualitative, intangible aspects that affect brand equity . Loyal customers become brand advocates , and this is very important for your company. In the face of an image crisis, for example, you will be able to count on people willing to argue in favor of your brand. This is more or less the logic behind personalities and celebrities.
Advocates are also promoters of your business. They can refer your products and services to other customers , which is known as word-of-mouth marketing. This reduces your customer acquisition costs (CAC) and helps build a strong customer base!