By Mitch E. Goozé
Branding is all the rage and has been for the past
several years. At one point, numerous dotcoms spent hundreds of millions
of dollars trying to create an "instant brand." It didn't work,
and the demise of many of these same dotcoms followed. So what is branding,
how does it apply in your market and how can you use branding as a tool
to help your company become more successful?
Brands are a "short-hand" method to remind
customers and prospective customers of what they can buy from your company
that they can't buy any place else (real or perceived). Implicit in that
statement is that there is something behind the brand.
Branding is a set of tactics that can be used to create awareness and
connection with a Brand. However, without a fundamental value proposition
targeted at an identifiable market, branding will not create a Brand.
Branding is not just:
- A Slogan
- An Ad campaign
- A Symbol
- A Logo
- A Jingle
- A Spokesperson
- A Product
Too many companies attempt to use branding to substitute
for creating a brand. This is usually an expensive waste of time. As stated
above, a brand represents the unique value(s) of your company’s products
or services in the mind of the customer and prospective customer. Good
branding is designed to leverage the value you propose to provide in the
mind of the customer or prospect. It is not useful for creating that value.
Name awareness without an understanding of the value inherent in the "name"
does not create a brand—it simply wastes money.
If your brand does not provide value (real or perceived)
in the minds of the customers or prospects, they have no reason to remember
your name and your branding activities are doomed.
Brands can add value in three ways: for the customer,
for the company and for the company’s stock price.
Providing value for the customer
If a brand does not provide any value to the customer then ultimately
your branding activities will fail. The customer won't pay for costs that
don't add value. Branding activities that aren't tied to a potentially
successful brand, result in lower profits.
So how does a brand add value for a customer? It is
the mind-trigger that reminds the customer of the value they can acquire
from the goods/services represented by the brand. In today’s frenetic
world, useful mind-triggers save time, and time is a very valuable resource.
If you create a successful brand, you must be careful
not to damage it with line extension or products that don't fit. If your
line is known for the science behind it, for example, introducing a new
product without sufficient science risks damaging your whole brand.
Providing value for the company
If a Brand provides value for the customer then it can and should be valuable
to the company. Brands, created by a value difference (real or perceived)
and effective branding tactics, provide a company with a useful difference
in the market. The process of finding and understanding your company’s
difference and then creating that mind-trigger for customers provides
your company with a powerful competitive weapon in the market. Valuable
brands that maintain value command shelf space in the mind, which usually
translates into more sales.
Effect on your stock price
David Aker, a professor at the University of California, Berkeley, has
determined from research that there is a positive correlation between
branding and stock price. Notice that I did not say creating a brand and
stock price. In reality, branding activity alone (done convincingly) can
increase your stock price. This can be a mixed blessing.
If you create a visible branding activity that is not
correlated to building a brand, your stock price may move upward due to
the belief that you may be creating brand value, even if you aren't. This
may sound good, but branding activity that does not tie to a brand has
no inherent value to the customer or the company and is ultimately a waste
of time, except to the extent that it increases your stock value.
Unfortunately, once it has had a positive affect on
your stock price, you can't stop the branding activities (even if they
are not truly brand building) without having a negative effect on your
stock price. This notwithstanding, your profits are going to suffer from
wasted branding efforts that can now have no more positive effect on your
stock price. (If this sounds like a potential "addiction" it
certainly can be. So don't get started, because it can be tough to "kick
the habit.").
Because it is so tempting to embark on a branding campaign
without having thought through the brand strategy, too many companies
end up on this path, resulting in countless wasted dollars at best, and
failed companies at worst.
Don't be seduced by the flash of branding tactics. Whether
it be a "Super Bowl" ad or a new promotional campaign, don’t
start without asking yourself, from the customers' perspective, “So
what?”
Creating a valuable brand is a process. The bad news
is it doesn't happen quickly. The good news is that your competitors are
most likely too impatient to do it right. This leaves you with a potential
competitive advantage...if you want to use it.
For more information: mgooze@cusomtermfg.com
or (800) 947-0140.
Website: www.customermfg.com.
Author Bio: Mitchell E. Goozé
is the president and founder of the Customer Manufacturing Group. Prior
to founding the company, Mr. Goozé was president of Teledyne Components,
a division of Teledyne, Inc., from 1985 until 1990. He is the author of
the recently released “The Secret To Selling More: It’s Not
Where You’ve Been Looking, If It Were You’d Have Found It Already”
and “It’s Not Rocket Science: Using Marketing to Build A Sustainable
Business.”
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