Understanding its worth

We assessed the impact of the RCA brand.

 

BY CLIENT

BY DISCIPLINE

BY INDUSTRY

Royal College of Art

The Royal College of Art is the world’s only postgraduate university of art and design. It has over 900 masters and doctoral students and more than 100 professionals and practitioners active in the college.

Our brand valuation formed part of a submission to the Higher Education Funding Council for England (HEFCE) to support the case for maintaining the college’s existing funding levels and status. The RCA was also in the middle of a fundraising project, to finance a new campus for its Fine and Applied Art departments.

Our challenge was to devise a robust and defendable way to calculate financial value of the brand, despite the not-for-profit nature of the college.

Because standard approaches for valuing brands require a profit forecast as a key input, we applied an adapted form of our methodology to assess the impact of the brand on future cash flows (rather than profits). We then calculated the financial value of the brand from this assessment.

Our study proved that the RCA owns and manages powerful assets, which create an economic advantage. These assets include talented lecturers, a prestigious location in South Kensington, spacious buildings and, of course, a strong brand and reputation. We also estimated that almost half of the college’s economic advantage was attributable specifically to the brand.

The brand creates value by positively influencing the perceptions and behaviors of a variety of stakeholders, including students, staff, donors, businesses, and specialist suppliers. It enables the RCA, through its impact on stakeholder behavior, to command premium fees and enjoy lower costs of doing business.

Professor Jeremy Myerson, Director of Innovation, at the RCA, said of the valuation: “Until now, we have had no way of putting a monetary value on the very many intangible benefits that accrue to the college due to its international reputation. This valuation has been a robust financial exercise that shows how the RCA’s brand gives the college an economic leverage.”

Professor Sir Christopher Frayling, Rector of the RCA, concludes: “The college has led the way in this area, but I have a feeling others in higher education will be interested in conducting similar exercises.”