Brand vs branding: what most get wrong about the art of making a name for your business.
If you can’t answer this simple question, then throw away your business plan: why does your business exist? It’s an important question because your purpose – why you get out of bed every day – is fundamentally linked to why people are willing to pay money for what you sell.
We’re talking about your brand. You’ve likely done work around your purpose and vision, the big picture stuff about why your business exists, and now you’re translating that into some sort of tangible expression through a brand. If you want the short version, here it is. Your brand is not your name, logo, colours, fonts and so on. That’s the creative component of branding. Your brand is about how you position your business in a way that speaks to the collective experience of why people choose you over a competitor.
This is a vital difference. Relegating your brand to the creative component means being limited to being about what you do. Engineering. Law. Selling houses. Inevitably, your business looks just like everyone else. Yet, reframing how we answer the question provides a powerful means of developing a brand, and way of communicating that brand, that positions a business for success. This is a strategic approach that impacts the entire business model, starting with treating the word brand as a noun, not a verb, and as an asset that turns perceptions into profits.
Brand as an asset
Through the exercise of building a profitable business, most people focus on their products (or services). You need something to sell to generate revenue. It ends up being well developed, as the chart below shows, to a point of Evolution, i.e. evolving with customer needs and desires. Image, a component of brand, is necessary in creating an identity that customers can engage with. Typically, it goes little further than the Implementation layer. Vision, Language, and Culture lag well behind and rarely go past the Concept stage. But brand as an asset, means developing all five domains.
When an organisation adopts a brand-led approach to business, more people have an awareness of the business, what it does, how it does it, and so on. That awareness means that when customers walk in the door, they are pre-sold, the introductions have already been made and the business can get to work converting its market potential into sales. Thus, impacting the overall growth in top line numbers as well as the bottom line. The brand is contributing to the bottom line, which is fundamentally why it becomes an asset. When it comes time to sell the business, the brand provides a serious uptick in the multiplier used to calculate the business valuation. So, where do you start?
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Context is king
The first stage of developing a brand asset is positioning. Take a step back and start considering the context of your business: what is the fundamental proposition your business takes to the market? What will help you differentiate your products and service from competitors? Market positioning assumes that market sectors buy for different reasons. Taking a position makes it clear to clients, and the business itself, who it’s targeting.
Typically, a business has a positioning choice between being based on distribution or products. Distribution means having a focus on external relationships through which a variety of products or services can be distributed. A product company has a focus on product research and development and its products are often better known than the company. A clear example is Coke and Pepsi. Coke, or The Coca-Cola Company, is a product business. The fact that the product name is in the common vernacular – a can of “Coke” – says it all. Pepsi on the other hand, forged distribution relationships across entire markets to compete with Coca-Cola.
There are other examples, and their choice is evident in their language. Look at Apple and Microsoft, Qantas, and Virgin, and so on. The product or distribution choice is a very strategic one. Of course, all companies do both operationally, and if you approach this choice from an operational or content viewpoint, then it will be hard to draw the distinction and be clear what to focus on. This can make it a hard concept to grasp, but understanding the purpose and context allows a business to explain itself in a compelling and succinct manner.
Growth stages
Treating brand as an asset and starting with a discussion around the context or purpose of the business provides three benefits: clarity, confidence, and control. Clarity about who the business sells to, how it sells, the product itself, and why anyone should care. Confidence comes from the creative expression of the brand. Image, language, and culture are aligned to the organisation’s purpose and are harmonious throughout. Finally, the content of the business, it’s day-to-day operations and how it attracts and engages clients to deliver sustainable growth feels controlled, rather than ad hoc.
The brand, now working for the business as an asset, supports its growth, from start-up through to advanced growth. The brand matures: at the start-up phase it develops recognition through a basic identity and collateral. In the growth phase, it earns a reputation as it thinks more purposefully about its positioning and creative expressions. Finally, in the advanced growth phase, the brand is adding to the business’s valuation. The brand functionality, architecture, structured approached to communications and so on, are all contributing to the asset value.
With the knowledge that your brand could be an asset, creating clarity and focus internally and externally that drive success, do you still just want a new logo?
To learn more about how brand positioning is key plank for driving revenue and business value, download a copy of the free Stellar ebook.