Just what is branding and why is it so important to business? Whether by luck or judgment all businesses have a brand – it’s the personality that a company transmits to the outside world.
Branding comes alive when you remember that you’re selling to people. Your customers are not ‘units’ or ‘assets’ or a ‘database’. Imagine your task is to make everlasting friends with your customers and you’re thinking branding.
The thing about humans is that we are just not logical. We are not a bunch of obliging Dr Spock’s nor, for that matter, are we anything like a computer hard drive that goes on absorbing information until it’s full. Despite the number of times we hear ‘don’t let your heart rule your head’ we actually cannot operate without letting this happen to some degree. The fact is, we humans cannot make decisions without feeling as well as thinking.
Understanding this is the key to branding. Give people emotional reasons to buy your product, make them laugh, make them curious, make them crazy with desire, make them fall in love.
Many marketers will trace the concept ‘brand’ to Al Ries and Jack Trout seminal 1969 work ‘Positioning: The battle for your mind’. Although others, David Ogilvy in particular, had been developing the idea of positioning, it was Ries and Trout who formalised the idea. They saw the human mind as containing ‘holes’ that could be filled by advertisers. Crucially these holes, once filled, were very unlikely to be emptied and re-filled by others. This basic lack of plasticity gave birth to positioning and brand with the added powerful commercial ingredient of brand loyalty. In an increasingly competitive market-place this was a big break through.
If the basic concept behind all advertising is to sell more product, marketers now had a way of building a loyal constituency which, if properly managed, would be very hard to shake. Using the various communication techniques at their disposal, agencies have been able to attach emotional hooks to the brands they are seeking to sell. Hence, in the competitive space of trainers, Adidas survive by being the Performance brand, whereas Nike are the Doing brand. In the motor car space you have Mercedes the Prestige brand, Audi the Technical brand and BMW the Ultimate brand. In simple terms the buyer identifies with the tag, moves into the product and, providing the promise is fulfilled, they don’t move. Here’s the contract; I want a car that is technically excellent. I see Audi’s claim this, so I buy one. It turns out to be just that so, when I’m ready for a new car, I buy another one.
So what is a brand? The definition most commonly given is that a brand is a promise. A promise to deliver the best trainers, the finest engineering, the sweetest taste, the coolest clothes, the safest car or the highest status wrist watch. This is fine as far as it goes. However, our experience of promises is that they are there to be broken. A more satisfactory definition in my view is that a brand is a delivery – after the promise.
Your brand is not just about a promise. It’s the bedrock of your business. Not only should it matter to the marketing department, it should matter to the FD, the Sales Director and to the shareholders as well. Why?
In a highly competitive marketplace it is vitally important that we put clear daylight between ourselves and the competition. The way you communicate your brand should acknowledge that consumers have a choice and, very importantly, that not every consumer will necessarily choose you.
Another, often misunderstood, aspect about being human is that we are really bad a retaining information. Just how much have you forgotten in your life? Loads.
The fact is that if we remembered everything we saw or heard our brains would explode. Over 50 million years or so we have evolved a brain that is as wonderful as it is complex and we’re only just beginning to understand how it really works. What we do know is we only really retain the information that is relevant to us.
This was another idea was behind Ries and Trout’s book. They recognised that it was perfectly possible, in a competitive economy, to build a hugely successful business, not by being the biggest or the first, but by finding a community of buyers with similar hopes and desires and creating a market ‘position’ that appealed to them. Once you have your community, you know that by firing off relevant and appealing information you will gradually draw in quite a crowd.
Perhaps the finest example of this is the battle between Hertz and Avis. In 1962 Hertz were an unprofitable company with only 11% share of the US car rental market and languishing in the wake of the dominant Hertz. By 1966 they had increased their share to 35% and were making hansom profits. How? By recognising the power of positioning.
Their ad campaign acknowledged their position as ‘underdog’ and made a big play for the consumer ‘vote’ with the line ‘We’re number 2 because we try harder’. They even invented the cult of ‘2ism’. Avis guessed right that many of us favour an underdog and built a very strong defensible position around this idea.
Interestingly, as a foot note, after a takeover by a large conglomerate, Avis changed their strap line to ‘We’re aiming for number one’. This moment of corporate hubris proved a disaster. The public backed the underdog but didn’t like to hear of its haughty ambition. They quickly changed back.)
What all businesses seek is a position in the market that they can defend with relative ease. Put in military terms, they seek an elevated site where they can spy the competition coming, then gather a large army of loyal customers around which they can build thick walls, ramparts and breastworks, all surrounded by a wide moat, accessed only by a drawbridge which is only carefully lowered to allow more customers in. The whole structure should look so unappealing to competition that they just keep moving on.
A strong brand has all these elements. My company was once hired by a well-known magazine company to devise a campaign to ward of an aggressive attack from a new entrant into the market. The competition had long pockets and plenty of time and, on first inspection, it looked like a pretty credible assault.
The first thing we did was to persuade them not to enter into a price war. The competitor had set out to ‘buy’ market share with free advertising and directory entries for pretty much as long as it took. My client’s sales team were panicking because they were having competitive marketing literature with ‘FREE” scattered all over it, waved in their faces. Their loyal customers were wavering. We argued that to start matching the competition is EXACTLY what the ‘enemy’ wanted. They could not be sure to destroy my client but they were fairly certain that they could inflict a fairly hefty blow on them. A price war would play into the opposition’s hands.
Instead we persuaded them to fall back on their defensible position and use the power of their brand to win the argument. We ran a campaign reminding their customers why they advertised with my client – in short, the years of work they had done in this market had ensured almost 100% distribution in newsagents and ½ million readers. They sold product for advertisers because they reached the buyers. For the competitor – however cheap the advertising – they were reaching no one. We also sent out a couple of free gifts to the database thanking them for their loyalty, with some certified statistics showing why they were the best in their field. We did not mention the competition once.
It worked, although the competitor’s title did survive, to date they have made very little dent in my client’s strong position.
Tip: Your brand is the emotional reason why customers buy. Your emotions usually over-ride your reason so if you work on your customers emotionally, a strong, logical argument, such as a cheap price from the competition, will often fall on deaf ears.
In a competitive economy every company should be able to complete the line ‘We are the ones who …’. In making a choice consumers are looking for products that most closely align with what they believe about themselves. A well marketed company will acknowledge this and create a culture which appeals to the widest possible community in the most compelling way.
There’s hardly a successful company that hasn’t done this. From Durex the ‘safe’ brand, to Gillette the ‘shaving brand’, MTV the ‘youth’ brand, Body Shop the ‘caring’ brand and Coca Cola the ‘classic’ brand, we know, when we pick up these products exactly what emotional message we are receiving.
The cola wars show this perfectly and also demonstrate how even the mightiest brands can get it wrong. In the 1980s Pepsi launched the Pepsi challenge to dispel the widely-held notion that Coca Cola and Pepsi were identical drinks. They did blind sampling to millions of consumers and were delighted to find that consumers generally preferred the taste of their product.
Coca Cola panicked. Believing that their dominant position was under threat they changed the formula – with disastrous results. Now, not only were they losing ground to Pepsi, they had also upset and insulted their core audience. Ironically, as it turned out, although Pepsi sales were up, the increase in sales was not because they had succeeded in growing their market share but because they had succeeded in growing the whole ‘cola’ market. Pepsi was up but then, thanks to Pepsi’s efforts, so was Coke!
Sanity eventually returned when someone in the Coke marketing department came up with the idea of relaunching the original formula as ‘Classic’ thus saving one of the world’s most powerful brands from free fall. Pepsi also realised that a bare-knuckle fight with their rival was pointless and hired Michael Jackson to launch the Pepsi generation (whilst also famously setting his hair on fire). Pepsi now could build a business around the younger generation and allow Coke to target the die-hard traditionalists. Harmony restored.
Very often, in the face of all logic people make seemingly totally illogical decisions. Good branding acknowledges this and accepts that most of our buying decisions are likely to be irrational. Take buying a car for instance. With the initial capital outlay, the running costs, the cost of fuel, serious congestion and depreciation, all logic says stay at home, let alone spend £15,000 on a heap of high-powered metal.
Car manufacturers know this and whilst they will always make claims about economy and the distance between services, what they are really interested in is telling just what owning their car is going to do for you. Last year BMW spent $158m worldwide advertising their cars. For this you would think that we would be familiar with every nut and bolt, its variable valve timing and just exactly how the drive shaft connects to wheels. We neither want to know or care. $158m was spent telling us that BMW is the ‘Ultimate Driving Machine’. A 3 Series parked in the drive gives kudos, status and sex-appeal (apparently). It makes a statement; it appeals to the emotions of the BMW kind of buyer and makes them want it beyond all the logic of costs.
One of the reasons that we often find people with emotional disturbances difficult to cope with is because we fear what their next move might be. Complex beings though we may be, we like nothing more than consistency, routine and habit. So, it is in the way that we interact with the brands we most like.
Customer loyalty is one of the most important things to all businesses. Good branding not only promotes it, it guarantees it. Think about all the products you use throughout the day, from toothpaste in the morning to the glass of wine with your supper. Just how much shopping about do you do? In fact very little. Once we have developed an affinity with a brand we take quite a bit of shaking off – often in the face of all logic.
Having a brand plan with recognised values and known emotional triggers gives a template against which you can test all your marketing and thus transmit a seamlessly consistent message to your audience.
Tip: Consistency is a law but predictability is a crime.
Here’s one for the FD – a person usually hostile to the marketing department as they see large amounts of cost without always being able to trace it directly to profits.
Your brand is a guarantee of up-stream cash flow. Think of the great brand owners of the world – Coca Cola, Moet et Chandon, Evian, Ben & Jerries, Sony, Microsoft to pick just a few – if they were to do no marketing at all for a period, they could be certain that all hard work they had already done would still bring them a healthy income. A strong brand gives your business a momentum of its own with the desirable consequence that selling is a whole lot easier. This is what is often called ‘pull’ marketing. By building up desire and demand, the end user will ‘pull’ your product through the market for you.
In the good old days, after scrutinizing the books the auditors would stroll out into the factory for a fixed asset inspection. By adding the value of such items as freeholds, plant, vehicles and investment assets to liquid assets such as cash then subtracting liabilities such as loans your accountants would come up with a balance sheet value for your company. For most businesses, there was a gaping hole in this valuation – their brand.
Sure, when it came to selling a business some calculation would be made about the ‘goodwill’ that existed between the business and its clients, a tacit accounting acknowledgment of the concept of branding. However, it is only astonishingly recently that brands have had to be included as balance sheet. Astonishing as very often up to 75% of the value of your business can be in your brand. To under value your company in this way seems odd. The most recent survey of the value of the world’s top 10 brands showed Microsoft at $62bn overtake Coca Cola at $55bn. $62bn is a big whole in a balance sheet by anybody’s standards!
But so much for the rarefied atmosphere of the super giants. What does under-valuing your company in this way mean to us in the real world? Firstly, it will affect your ability to raise cash to invest in your business. A lending source, be it a bank or a business angel will be looking to offset their investment against the what they might get back if the company were sold. It’s not the only thing they will look at but it is vitally important.
However, the most obvious effect is on your exit strategy. Concentrating on your top and bottom lines are all very well and an important part of selling your business but if you really want to cash in concentrate on building a brand.
Branding both an art and a science and, as such, is not easy to deconstruct. Imagine trying to describe how to make someone a loyal friend, not easy. However this, in essence is what building a strong brand is all about.
I have read a great deal about the business of building a brand and have encountered many conflicting views. Easily the best definition I have come across is from Wally Ollins whose company, Wolf Ollins, has been a watch word for brand building for four decades. I hope he will forgive me if I use his framework – with a fairly hefty spin of my own. [Just to make him feel better I will (and can) heartily recommend his book ‘On Brand’.
Ollins breaks the process down into four areas – product, environment, communication and behaviour.
Don’t let anyone tell you that you can build a good business out of a poor product. Your product is at the heart of what you do – hone it, shape it, refine and – most importantly – define it. Make it slicker, quicker, shinier and much better value than the competition and keep working on it.
Often called ‘brand experience’, the environment in which your customers meet with your brand is vitally important. In short, we like to repeat good experiences and avoid bad ones. The expression ‘touch points’ is often used in conjunction with this concept and is a good one as it helps you visualise what this really means.
Think of every instance where your customers ‘touch’ your brand. From your website and social network sites to your brochures, your packaging, your vans, your reception area, your shop, your restaurant, your advertising – everywhere your customers encounter will have some impact on what they feel about you. Work on making it positive, making it human and making it consistent.
‘Load, aim, fire!’.
After many, many hours spent designing your product, identifying its USPs, listing out its features and benefits and identifying your target audience, it’s now time to tell them about it.
If everything about branding is about the fact that businesses deal with people then it is never more important than how you communicate with your customers. I know that a well-known direct mail clothing company has a composite picture of the typical male customer and the typical female customer on the wall of the marketing department. He’s called Henry and she’s called Caroline. Every new idea, every new line and every new product has to be run past these two. Would they wear it or use it?
I like this idea. We spend so much time talking about being customer orientated and getting into the mind of the client but creating characters in this way – and displaying them – is a powerful way of making us practice what we preach.
The key lesson about your communications is to keep it human. Write sales copy that addresses your target audience one to one. Imagine sitting in the pub on Friday evening trying to explain what you do to a stranger. We don’t talk in bullet points so don’t write in them. Remember to sell the result – the benefits not the features – because that’s what our customers buy. Think about your product or service and think what it will do for your customers, think how it will improve their lives, make them look better, feel better, enjoy life more or just feel good about owning it.
However, perhaps the most important aspect of your communications is that they should be consistent. Over the years it never ceased to astonish me how little people used brand guidelines and how much of a delight people took in ignoring them. We worked hard in our design company to find ways of having them universally adopted. The fact is that it’s these guidelines that underscore all the considerable effort that you will put into creating a powerful brand. What good branding achieves is to create a community of like-minded people who developed a loyalty to your company’s products or services. Your communications act as the trigger to remind the consumer that they are in right place or have picked up the product – time and time again. It is therefore absolutely vital that you chose the right colour schemes, the right type of imagery, the right logo and the right type-faces and stick to them.
Tip 1. Make sure the first page of your brand guidelines gives a short and to the point explanation of why consistent communications are important. If you don’t do this, you cannot be surprised when people don’t abide by them
Tip 2: If you have a central server make sure that you have templates for all your communications saved somewhere they can be easily found. Take time in particular to let people know where they are and how to access them. If you don’t have a server make someone, such as the office manager, the ‘keeper’ of the templates. This person should also be given the responsibility as brand guardian with instructions to keep a beady eye on everything that goes out. The sales team are the worst offenders – they seem to think that a little ‘clip art’ creativity will ramp up their chances of a sale. Take time to prepare some really fine PowerPoint templates with your graphic designers and staple them to the sales manager’s forehead.
The concept of behaviour is an important and powerful aspect of how our businesses are perceived and how profitable and sustainable they are. Sometimes known as company culture, behaviour is all to do with the service we receive. Examples abound but one of the most obvious is in the airline industry. We almost always form our judgment on whether we had a good flight, not on the speed of travel but on how we were treated on board. Airlines accept that traveling time is a given, their point of difference is their level of service Virgin Atlantic have exploited this very effectively. As a relatively small airline they recognise that there are so many levels on which they cannot compete – price and frequency being just two. What they can do, however, is really look after their customers from terminal to terminal and so First Class becomes Upper Class and the marketing line for Economy is ‘Our Economy Class puts the emphasis on class’
By embedding behaviour through staff training every business can deliver a consistent brand experience and it’s this level of consistency and reliability that build the loyalty on which sustainable profits depend.