COMMENTARY. Some executives and business leaders understand what branding is all about. Most don't. It's got to be one of the most misunderstood concepts in business and I have no idea why. It's not really complicated.
Still, if you ask 10 business people to define a brand, you'll get 10 different answers.
Is it a promise of product performance, an assurance of quality or service? Or is it the perception of value or satisfaction through association with a company or product? Is it a sensory, emotional, or cultural image of a company? And is it really a source of lasting competitive advantage?
It's actually all of those things, and more. I know that sounds complicated, but it really isn't. Let me explain.
The concept of branding has evolved quite a bit since the days of the branding iron, mostly because the business world has changed a lot since then. Modern day branding works sort of like this. Every company has stakeholders like customers and shareholders. Brand reputation is what those stakeholders think and feel about the company.
It's a function of all the experience those people have with the company, its products and services, and includes influence from lots of different sources, including product features and performance, customer service and satisfaction, PR and the media, even online search results and social media, as well.
If people are aware your company exists and sells a certain product, they might consider it for purchase. If your company has a strong positive brand reputation, eventually you end up with loyal customers, the holy grail of branding.
If you want to get technical, you can talk about brand strategy, platform, positioning, promise, personality, perception, identity, hierarchy, metrics, all sorts of arcane stuff. But frankly, I'd leave all that for folks that do it for a living.
To boil it down to a simple concept, a brand is very much like an image or perception of a company or product. As a result, it's a function of a considerable number of factors, which is probably why there's so much confusion and, as you might expect, loads of myths. Here are my top ten:
Myth #1: Naming and logos are expensive and worthless. Yes, some companies go way, way overboard on, but in my experience, just as many, if not more, under-scope it and screw it up. Since you've got to have company and product names and there are a ridiculous number of pitfalls, it's a good idea to do it right, but that need not be expensive and it's certainly not worthless.
Myth #2: Big brand loyalty is dead. The Internet killed it. While it's true that the Internet is a great equalizer in many ways, in other ways, it has the opposite effect. For example, Google isn't really a superior search engine to Bing, and yet Google is one of the most highly valued global brands, primarily because it's become an internet verb. Apple has tremendous brand loyalty and value because it makes consistently great products. Big.
Myth #3: Branding only matters for consumer companies. No, no, and no. Most companies don't market to consumers but to other businesses. Lots of companies are ingredient companies, meaning they're products or services are technologies, ingredients, or components in products sold to consumers. Regardless, if you've got customers and other stakeholders like shareholders and employees, your brand is important and you should manage it.
Myth #4: Personal branding is a big deal. Yes,, but it's sort of silly and trite. I'll tell you why. For big companies, branding is complex. For small businesses, it's straightforward. For a single individual, it's trivial. Be aware that everything you say and do and everything others say about you impacts your reputation. Try your best to manage it. That's pretty much it. That's not branding. It's common sense.
Myth #5: Branding is all about advertising. It never really was, since brand reputation is about the sum of all interaction with the company from all sorts of sources. But these days, old-school advertising has, to some extent, fragmented into product placement, SEO, interactive / online, etc. So branding is even less a strict function of advertising than it was before.