Branding is one of the more misunderstood things in the business world. At glance they seem like a simple label on the front of your product, but they have a sophistication that can defy logic.
It is often tempting to look at business through a rational lens; a balance sheeted story of assets, liabilities, transactions and capabilities. The humanistic side of business is often seen as less important, and more disposable. Anyone in Marketing or HR will know what I mean.
However, if you wish to attract good staff, or customers, or partners to your business, then you need to be able to understand how to influence people. Branding is one of the most important ways that this can be done.
There are three dimensions of branding that explain this.
1. Brands create identification
With the use of symbols, words, images, colour, sound and other elements a brand takes on a distinctive form with which to identify a business or product. This gives people something to recognise and gravitate to.
Managed well brand identification can help your product stand out on shelf. Done poorly it can make your product invisible.
Brand identity can be loud and proud like Pak ‘n Save’s yellow and black, or incredibly subtle and understated. The idea is the same: branding provides a way for people to connect with your product rather than a competitor’s.
2. Brands carry human values
Companies and products are inert by nature. However, they can become more attractive and relatable to people, and therefore more valuable, by adding human values through branding.
Brands can make a product – and consequently the people who use or make it – seem more exciting, more sophisticated, more responsible, more worthy, or more edgy.
This gives people more than simply the functional utility of the product. It provides the added value of a concept for people to relate to. Anchor provides family values, Lewis Road Creamery delivers foodiness, My Dog helps me feed our dog with love. This is why some people will pay a 600% premium for a Gucci plain white t-shirt compared to a plain white K-Mart t-shirt.
3. Brands store equity
The third element of branding is its role as a unique, owned entity that captures and stores equity. The brand is a repository of consumer preference, goodwill, future revenue, intellectual property and commercial contracts. The brand is the sum of the business’ reputation, and what people think about when they hear the name.
“Brand is the sum total of how someone perceives a particular organization. Branding is about shaping that perception.” Ashley Friedlein
Taking good care of your brand
Good brand management requires carefully integrating three factors:
1. Definition – All good brands have a clear, distinctive value proposition for customers and internal teams. Your brand has to stand for something, or it will stand for nothing.
2. Investment – In competitive marketplaces it is essential to keep your brand visible, fresh, relevant and attractive. This means providing enough investment to cultivate your presence. Best practice in brand management (Field & Binet) indicates that a company should invest 60 percent of its promotional spend on brand building and 40 percent on sales conversion.
3. Consistency – In order to earn trust brands need to be consistent. This does not mean being one-dimensional, it means being true to what you stand for. Harvey Norman, Coca-Cola, and Heller’s are all brands that have created success through nurturing a consistent brand meaning.
In the end brand management is a matter of taking good care of what you have.
“It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.” Warren Buffett