People often say that brands and the reputation they convey are difficult to value and some even dismiss them as worthless `froth’ that distracts from the hard metrics of profit and sales. The case of Volkswagen and the emissions scandal shows a hard-learned lesson on the real value of a brand.  The company’s share price dropped by 35%, wiping around $17½ Bn. off the company’s value almost overnight.

For many years we have seen how brands play a large part in product selection, no more so than in the automotive industry. They all get you from a-b, have 4 wheels, an engine and seats of some kind, but what makes a car worth £10k more than another?

The brand and its reputation are priceless, a VW Golf and a SEAT Leon for example are essentially the same car – same chassis, share most of their components – yet VW commands a premium price.

Whereas a VW Phaeton is essentially a Bentley in the same way but the Bentley sells for 4 times the price. VW share price has dropped by 35% in just over a week and not all of that drop is the expected hit of compensation claims – a good proportion is reputational damage to the brand and an expectation that it will lose consumer confidence and therefore any price premium through the damage to the brand.

So what we have is a dramatic illustration of the value a brand brings to a company or organisation. Rather than being these vague and woolly concepts, brands add value. For VW, we can see the scale of the brand’s value in the devaluation of the stock as the brand’s value has fallen.

This has got us thinking about the importance and value of managing your brand through insight? Any organisation can benefit enormously by creating a brand that presents the company as distinctive, trusted, exciting, reliable or whichever attributes are appropriate to that business. The difficult part is keeping it that way.

It’s clear there needs to be a big change in the coming weeks and months in light of the Volkswagen emissions scandal, they have started with the VW America boss Michael Horn saying “We’ve totally screwed up,” while the group chief executive Martin Winterkorn said his company had “broken the trust of our customers and the public”.

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Some more of the latest facts:

With VW recalling almost 500,000 cars in the US alone, it has set aside €6.5bn (£4.7bn) to cover costs. But that’s unlikely to be the end of the financial impact. The EPA has the power to fine a company up to $37,500 for each vehicle that breaches standards – a maximum fine of about $18bn