Hypothetically-speaking, if very Coca-Cola bottling plant throughout the World were to simultaneously burn down along with corporate headquarters here in Atlanta, the banking community would gleefully lend the funds needed to rebuild each and every hard asset to them.  Why?  Because the value of Coke’s goodwill (an intangible asset) by far exceeds the cost of reconstruction.  Their equity line is massive.

Goodwill is another way to define brand – a definition that accountants and other left-brained pragmatists can appreciate.  The value of goodwill is worked into every public company’s market cap and is often the magic pixie dust that keeps stock prices moving up.  In the case of Coca-Cola, the value of their goodwill can be used as collateral to rebuild everything.  Pretty valuable pixie dust indeed.

To maintain and grow goodwill, many interconnected variables must be nurtured including distribution, customer loyalty, price stability, corporate reputation, consumer marketing, environmentalism, EOC (employer of choice) status, and more.  Marketers would like to take the lion’s share of the credit, but that’s unfair to everyone else who fulfills their responsibilities to ensure the product delivers against the Value Proposition created for it.

In the consumer space, goodwill is complicated in that emotional and irrational attributes are just as critical to brand success as the physical and rational.  This is why the NBA has come down hard on Gilbert Arenas (guard for the Washington Wizards) for his “handgun in the locker room” fiasco.  The NBA brand had finally removed the ‘thug’ tarnish that pervaded the league post-Jordan.  This new PR nightmare re-tarnishes the league and dramatically lowers its goodwill valuation.  If the NBA were publicly traded, its stock would have taken a huge hit.

In the B2B space, irrational benefits are not as critical.  Here, it’s expertise and capabilities (rational attributes) that drive preference, not how it makes me feel.  This is why the mathematical formula for B2B goodwill (or brand) is simpler to calculate.  The emotional variable is greatly reduced and not nearly as influential to the calculation.

Broadly speaking, the two primary variables to creating B2B brand relevancy are awareness and perceived expertise.  The more you can increase either (ideally both), the more relevant you become to your target audience.  Multiply brand relevancy times sales effectiveness and you can project revenues.  The beauty is that it’s simple math that can be tracked and managed.

Operationally, Marketing should solve for (and be measured against) building awareness and perceived expertise among the target audience, while sales solves for converting seasoned prospects into customers.  Each department is now results-oriented and has measurable goals to attain.  Successfully managing both sides of the equation not only drives corporate goodwill, but revenues and profits as well.

It’s simple math.