1. THE VALUE OF A BRAND
Without a brand you would quickly be reduced to selling product advantages and price, and before long you would be defending against commoditization and probably shrinking margins. Branding adds the emotional dimension; creating relationships with consumers that go beyond the analytical. It offers companies the opportunity to elevate their strengths in product, price and service, and can even protect against their weaknesses. The strength of a brand saves companies when they fail, such as with the VW fiasco, and amplifies their victories when they succeed. Your brand is not short term, like a campaign, but meant to last. It becomes the engine for your growth in share, profit, and markets. Overtime your brand can become your company’s most valuable asset.
THE STRENGTH OF A BRAND SAVES COMPANIES WHEN THEY FAIL AND AMPLIFIES THEIR VICTORIES WHEN THEY SUCCEED.
Many company leaders would love to reduce business to the predictability of engineering. It would certainly make their investors happier. That’s why those same companies often invest little in this comparatively mushy thing called branding. However, it’s really dangerous, in most instances, to ignore your brand.
Despite our attempt to be coldly rational and analytical in our purchases, all buyers, B2B and B2C, are always influenced by their emotions. This is important because it’s easy to forget that brands are actually all about people, rather than products. Strangely it’s taken the influence of technology for the human component to rise in importance. Whereas David Ogilvy, in the simpler days of Mad Men, described a brand as “the intangible sum of a product’s attributes,” Jeff Bezos, founder of Amazon, says: “A brand for a company is like a reputation for a person.”
You probably know that the idea of branding comes from literally putting your mark on your livestock. That basic idea was perfected in Ogilvy’s day and grew to include ideas and beliefs, but was still somewhat superficial. Since the advent of the digital age, however, brands have come to mean much more. At the root of this evolution is our easy access to information, and the consumer’s ability to affect a brand by quickly and widely exchanging opinions. Sharing experiences, or seeing what other people are saying about their brand experiences, is easy and fast. Whereas branding used to be predominantly about what companies say, today it’s more about what they actually do. Of course the way a company behaves has always been important. The difference is that before the internet, if you had a poor experience with a brand, usually all you could do was write them a letter or tell your friends at work. Today, on the other hand, if brands don’t perform, consumers can and will punish them in social media, ratings & reviews, and more. For consumers, it’s easy and quick; for brands, it can be enormously damaging.
BRANDING USED TO BE PREDOMINANTLY ABOUT WHAT COMPANIES SAY. TODAY IT’S MORE ABOUT WHAT THEY ACTUALLY DO.
Even with Sears on the ropes, Craftsman tools remained “America’s most trusted tool brand” until Sears moved manufacturing to China and sacrificed quality in the process. Then social media posts like this one started lighting up the internet “For many years my family, Dad, Grandpa, and uncles used Craftsman tools. Won’t buy another, ever. Make them in America again!!!” It’s a mistake to think that consumers won’t notice or say anything. Conversely, it can also be very valuable if you do a good job, not just for your business at that particular moment, but for the overall strength and worth of your brand going forward. I personally had a tremendous experience with Chubb insurance a few years ago when a tree fell and nearly destroyed my house. I couldn’t believe how terrific they were and told everyone I knew, in social media, the easiest way I knew, that they were a wonderful company to do business with. There, I did it again.
A study by WPP’s BrandZ between 2004 and 2015, measured the ability of brands to deliver in three key areas: differentiated value proposition, brand identity and advertising. Brands that did well on all three measures had value growth of 168% over the 10 year period. But brands that were weak in all three areas grew their value by only 21%. This big disparity in financial performance speaks to the value of having a healthy, aligned brand. In 2014, for example, strong brands outperformed the market by 73% according to McKinsey, up from 62% in just 2013, and according to Gallup, which has done many studies on brand value, getting this alignment right actually doubles share of wallet.
WHILE SOME COMPANIES HAVE ADJUSTED TO THE NEW REALITIES, MANY STILL HAVEN'T.
Alignment means that the promise a brand makes to its target consumers is not only understood and valued by those consumers, but is actually delivered at every touch point. It means that the purpose and values of the brand are clear, meaningful and real, and that there is a consistency to the brand personality and identity across the board. This can’t be just some marketing veneer anymore, but must be the guiding principle of the brand and the organization behind it. That includes the people who bring the brand to life for consumers every day. Despite this, Gallup tells us that less than half of managers, and only a third of rank-and-file employees, say they know what their company stands for and what makes them different. This underscores the notion that while some companies have adjusted to the new realities, many still haven’t. Hopefully, if you are reading this, your company is in the process of making these adjustments. What your brand needs to be and how it needs to be structured in order to be relevant and compelling to today’s consumers will be a huge part of your winning formula.