Watch CBSN Live

Does Your Company Have a Brand or a Reputation? How to Tell the Difference

Brand is to business what sex is to life: it's what excites and inspires people---and drives them to ever greater extremes of abject silliness.

Every organization I've ever been involved with has talked about its brand, even though in most cases, almost no one had heard of the brand, the business didn't operate in the consumer market and the product sold could rarely command a premium price.

Apart from leadership, there is no topic in business which generates more fuzzy thinking (and eats up time, money and energy in the process) than this term, "brand." So what is a brand?

About a year ago, I interviewed the British industrial designer, James Dyson, who reinvented the vacuum cleaner, the hand dryer and now, the fan. Dyson came out with the best, most succinct definition of a brand I've ever heard: a brand, he said, is what allows you to charge a higher price for a generic product.

If what you produce is truly unique, you don't need a "brand" to sell it. Dyson's Airblade Hand Dryer works so much better and faster than any other hand dryer on the market, that his customers need only understand its superior engineering. That's all. And that's what Dyson's ads do: explain how his products are different and better. He doesn't believe he needs a "brand" -- because the product itself has meaningful, substantial differentiators.

But what if your product isn't particularly distinctive? Then you need something else to justify your prices. That something else is brand. That's why Coke is a brand and Mercedes is a brand: there are so many products that are roughly similar that you need an abstraction to sell it. That's what all those extravagantly expensive ads are about: creating an air of excitement that makes a pretty standard product feel special.

Most of the organizations I work with don't have brands, by that definiction. They have logos, and they have a reputation for good work. These are often confused with brands, but they aren't the same. Why? Because there is nothing about this businesses that lets them charge significantly above average for their products. That's the acid test. In many cases, these companies win business because of their relationships or because they're uniquely positioned to solve a particular problem. That still doesn't make them a brand. If they were more consistent in the way they used their logo, and if they invested more time building those relationships, their growth would be more assured than when they waste yet more time discussing a brand that they don't have and don't need. Like Dyson, they should focus on the substance that makes them special.

What's most intriguing about Dyson's definition is that he doesn't believe his own company has a brand - and he's perfectly content with that. The business, he says, doesn't need a brand because what it has is unique, outstanding engineering. That's what he believes in, it's what he makes and it's what he is willing to stand or fall by.

An engineer's clarity is a wonderful thing.

Image courtesy of Flickr user KB35, by Kevin C.C.2.0

View CBS News In