branding

Best Practices: Branding

What is a brand? Is it defined by your company logo? Your product packaging? Your expensive advertising and public relations campaigns?

According to Vistage branding experts Duane Knapp and Tryg Jacobson, these are all elements of branding, but by no means the whole story. In fact, they contend, the notion of branding is misunderstood by even the most marketing-savvy organisations.

"Branding represents the intangible part of your business," Jacobson says. "Products are tangible. They're made in factories and stored in warehouses; they're things you can hold in your hand. A brand, by contrast, is a collection of intangibles -- ideas, feelings and word associations. These intangibles reside in the real estate of your mind."

"A brand must stand for something larger than just a product benefit," adds Knapp. "It represents a value proposition. Consumers choose one particular brand over another because of this intrinsic value."

Because it incorporates the customer's viewpoint, Knapp contends, a "brand promise" differs from a company's mission or vision statement. It must focus on answering three questions:

What business is our brand in?
What differentiates our products and services from our competitors?
What is superior about the value we offer our customers?

"Branding serves as the link between your product's promise and the consumer's desire," Jacobson says. "The goal is to express a set of basic principles that can be understood by everyone who comes in contact with your business -- customers, shareholders, employees, etc. The brand is your reason for being."

According to Knapp, a "brand blueprint" consists of five basic components:

Brand name: A name that is unique, memorable, distinctive
Graphic representation: An icon, symbol or image that vividly expresses your brand's identity
Byline: A descriptive word or phrase that tells consumers where to place your brand in their mind's eye, and that always appears with the brand (i.e., Whirlpool Home Appliances).
Tagline: The message that expresses your product's functional and emotional benefits to consumers
Brand story: When you identify your brand, be sure to communicate and preserve its heritage.

Jacobson identifies "four pillars" of branding:

Differentiation. To create a brand, you have to set yourself apart from everyone else in the market. You can't build a brand by being the same.
Relevance. Relevance has to do with appropriateness, meaningfulness and, ultimately, the value of your point of difference. If your product or service isn't relevant, your point of difference won't attract customers or keep them.
Esteem. When you succeed at building relevant differentiation, customers respond with high esteem for your product or service. Brand esteem can maintain high levels even after a brand has lost its point of difference (e.g., luxury and prestige brands).
Understanding. This refers to how well customers understand and believe in your point of differentiation. Understanding also represents an important diagnostic indicator of brand health. For example, when customer esteem for a brand falls below understanding, it means that people know you but they don't like you. If they don't like you, they won't buy your product.

Brand Strategy

Although strategies differ in tactics from industry to industry, a brand usually develops along these lines:

Identify the message. A company defines a core message by identifying the distinctive value of its products and services -- why its customers care about what it has to offer and what makes it different from its competitors.
Build the message. When the distinctive value is identified, it must be framed in a succinct message people can understand and relate to. This will reinforce the core value of the products and services.
Promote the message. What good is a message if no one hears it? The company must make a strong pledge to aggressively market its product and, over time, to solidify its image (and its associations of quality) in the minds of consumers.

"Determine what you do that your competitors don't," Knapp says, "and hit that theme hard -- again and again. Find the line, the phrase, the image that defines your company and use it."
"Be" the message. The message is chosen, marketing and advertising campaigns are busy promoting it -- but how well is the entire organisation living it? Is there a direct connection between the brand message and the customer's experience when she walks in the door and purchases your product?

"The brand has to support the message," Jacobson says. "If you say you'll do something and the customer's experience contradicts this, it's the brand that loses."

What is Your Brand Worth?

"Brand equity is the totality of the consumer's perceptions," says Knapp. "This includes the quality of products and services, the company's financial performance, customer loyalty and satisfaction. It's all about how consumers, employees and other stakeholders feel about a brand."

Adds Jacobson: "A brand equals trust. To build trust, you need a perception of value and a promise of quality. First you create value, then you deliver on it."

The brand serves as a valuable tool for consumers forced to choose among the bewildering array of products and services in the marketplace. Consumers depend on "signals" that a brand sends out -- those intangible associations with quality that it represents. Therefore, it's up to the company to carefully influence and manage those signals at all times, in all encounters with their target markets.

"Customers develop their perception of value through a subjective process based strictly on their own needs, preferences, buying behaviours and habits," Knapp says. "A company's brand promises to meet those needs and deliver each and every time. Growth comes from serving customers better -- not bigger -- and concentrating on the brand's unique area of competence."

The Chief Executive as "Brand Champion"

Every business needs a "brand champion" -- an individual charged with the authority to ensure that a consistent message crosses interdepartmental lines throughout the organisation.

"This person should be responsible for clearing internal communications and/or designing corporate specifications for marketing, sales, administration, personnel and so on," Jacobson says. "This way, even if all materials aren't being cleared by him or her, guidelines and procedures are in place to ensure that a consistent message is being delivered."

Again and again, the Vistage branding experts urge consistency as the brand's champion's foremost priority. "Inconsistency generates mistrust," Jacobson says. "There should never be more than one version of your logo. Your literature should resemble your business card, which should resemble your advertising, which should reflect the people who represent your company."

To the extent that a company's materials lack consistency, the company loses the brand's perception of value and compromises its pledge of quality.

"Innovating products and services alone doesn't necessarily achieve any long-term position of privilege with customers," Knapp observes. "For a brand to be genuine and truly successful, the organisation must think like a brand. Everyone in the organisation must have a personal understanding of what the brand stands for and what their role is in delivering on that brand."

"It starts at the top," Knapp says. "The Chief Executive must understand that applying a brand strategy requires shared values throughout the organisation. From the production line to the front-line sales staff, every employee is responsible for helping to build brand value. There should be a unified effort to only do those things that improve that value to the customer."

Positioning the Brand

Flourishing brands promise specific benefits and deliver on them consistently. Wal-Mart promises low prices on quality merchandise. FedEx promises dependability that customers can track. But, says Knapp, the brand position is not achieved by a company's marketing staff. The real positioning is done by the customer himself.

"Marketing and advertising efforts send out signals a company wants to instill in the consumer's consciousness," he says. "But it's the customer who weighs those signals against all the other signals being sent out by competitors."

Jacobson offers these suggestions to help position your brand:

Develop a list of performance characteristics your customer is looking for in the product category you're selling in. You can develop this by surveying a small group of customers.
In a telephone interview, have your customers prioritise the attributes for you and then link them to the brands they feel are most closely connected to specific attributes.
Do your customers connect your brand with a certain attribute? Is it an attribute that sets you apart? Is it an attribute you can own and deliver?
If so, claim it and connect it with a theme you can make "larger than life." Look for ways to communicate your brand's point of difference and find ways to make your point of difference grow in importance (relevance) to your customers and prospects.

Extending the Brand

It's a problem many companies wish they had: you have a strong, functioning brand, so when is the right time, if any, to extend that brand? The Vistage branding experts feel that a whole host of considerations should come into play before making the decision to leverage brand equity into new areas.

"A brand extension works if the new product follows and enhances the promise of the original brand," Knapp says. "All too often, however, the necessary 'brand discussion' doesn't take place, and the organisation ends up selling something different with a similar name -- a product or service no one really wants."

"Before extending the brand, a company should know what it's getting into," Jacobson says. Ask these key questions in the early planning stage of a proposed brand extension:

What products should we attach the brand to?
What products surpass or contradict the brand's implied promise to customers?
Will the extension result in an increase or reduction in sales of the core brand?
What effect will the extension have on the parent brand's identity?
Does the extension make sense to customers?
Does it bring new customers into the fold?
What happens to the core brand if the extension fails?

Knapp adds: "Customers are often wary of established brands moving into apparently unrelated product areas. Extending a brand requires immense focus, energy and resources. Companies should first think about exhausting the possibilities of the core brand before moving beyond it."

Online Branding

In many ways, online branding closely resembles the branding process in the physical world. According to the Vistage branding experts, the underlying principle remains the same: the brand represents a promise of quality to customers and a commitment to deliver on that promise time and time again.

In Knapp's view, an e-brand consists of these key elements:

Distinctiveness. The website and its brand possess unique characteristics.
Perception. It is perceived as a distinctive brand by the target audience.
Benefits. Customers derive functional and emotional benefits.

"Use the website to provide a clear, accurate representation of your business," Jacobson says, "and then focus like a laser beam on meeting customer needs. Make sure your online brand matters to consumers in some significant way. Otherwise, it's just another distraction in cyberspace."

As in the "real world," e-commerce brand-builders must concentrate on their product's personality, presence and performance. Every aspect of the customer's experience must be closely managed -- from the first time he clicks on the website through product purchase and delivery. Why is this so important? Because, say the Vistage experts, every online experience influences the consumer's perception of the brand.

Just as "brand equals trust," Jacobson says, so the design and presence of the website should emphasize its value as well. "Someone who experiences your brand online wants to know the site will be there next week, when they want to make a new purchase. They want to know you'll have the item you're advertising in stock. They want to know that their transactions with you are secure and protected. All of these commitments come together with your online brand."

Contributing Experts:

These experts were selected from Vistage's stellar corps of expert resource speakers. Vistage subject matter experts regularly share their expertise with individual Vistage groups in highly-interactive half-day sessions.

Tryg Jacobson
Tryg Jacobson is chairman of Jacobson Rost, a Wisconsin-based advertising and marketing agency with $50 million in revenues and more than 50 employees. Tryg is a 1978 economics/speech communications graduate of Macalester College in St. Paul, Minnesota. Prior to joining Jacobson Rost in 1981, he was a string writer for United Press International and founder of Minneapolis-based Ice Nine Corp., a manufacturer of textile printing products. He has been a member of Vistage for 10 years and has taught his branding approach to a wide range of clients, including Kimberly-Clark, Mercury Marine, Miller Brewing, Kohler Co., Bemis Manufacturing, Appleton Papers, Kaytee Pet Products, Ariens, Boss Snowplow, the Green Bay Packers and more. Tryg currently addresses Vistage groups on the subject of "How to Create Brand Positioning in Your Company."

Duane Knapp
Duane Knapp, president of BrandStrategy, Inc., advises leading brands worldwide and specialises in creating and implementing successful BrandStrategy doctrines. Clients include the American Society of Association Executives, Los Angeles Convention and Visitors Bureau, Seattle-King County Convention and Visitors Bureau, American Automobile Association, AT&T, Federated Department Stores, Macys.com and Telefonica Movil. He is also Executive Director of FutureBrand, a worldwide brand consultancy with 30 offices in 19 countries. Duane's work has been featured in more than 50 business publications, including Business Week, Brandweek, CFO Magazine, Association Management and Washington CEO. A graduate of Western Michigan University (with a B.A. in business administration), Duane earned an MBA from the University of Toledo and also completed a postgraduate programme in strategic marketing at the Stanford University Graduate School of Business. His book, "The BrandMindset®," published by McGraw-Hill, was selected in 2000 by IBM and American Express as the "must read" book for their top 400 executives.