What people think of you really does matter. In the world of business, this notion is embodied by the concept of the ‘brand’.
If you have eyes and/or ears, chances are that you’ve come across the term ‘brand’ more than once. The terms ‘brand’ and ‘branding’ are used to cover a broad variety of concepts, to explain business plans and justify budget decisions. Yet, to many, the definition of a brand and the purpose of branding remain unclear. Because, in the end, isn’t branding just a fancy word for marketing?
After reading this, you’ll know why that’s not the case, and why your brand is your most powerful value driver (and how it’s not yours at all).
Now, if branding isn’t the same as marketing, then what is it?
Well, first and foremost branding is not about selling products. The objective of branding is to increase brand equity. Here’s why that makes sense:
The fabled Brand Equity
Brand equity is the value added to a company from a memorable brand name with strong, positive brand associations (more on that below). The value of brand equity manifests itself in a variety of ways, such as increased sales, higher margins, more business and sales opportunities, attracting talent and providing clear marketing guidelines.
Why bother? How much value can a brand really add? Let’s take Coca Cola as an example. The soft drink company has the world’s most valuable non-tech brand. According to the most reliable estimates, the Coca Cola brand makes up between 45% and 50% of the Coca Cola company’s worth. That’s half the worth of a multibillion-dollar, global FMCG giant. And that’s why you should bother building your brand.
No matter what kind of business you run, how big it is, who your client base is, or what you do, building your brand will give you significant advantage.
Now that we’ve got the why covered, let’s have a look at the how:
Your brand isn’t yours at all
When I ask people if they know what a brand is, 95% of the time I get the immediate answer “yes, sure”. But when I then ask the same people to define a brand, it’s followed by a few minutes of silence. After a while, I usually get something along the lines of “well, it’s your name, your logo and your slogan”. That is indeed part of the truth. This is what graphic designers will usually sell you as branding. And it is important! But Coca Cola’s name, logo and tagline didn’t create a brand value of $60 billion by itself. There’s more to it. Much more.
The real, value-adding brand is not yours to hold. Your brand is essentially an idea developed and kept in people’s memory. Explained from a neuromarketing perspective, a brand is a concept stored in memory within a network of associations. Its meaning and value depend on how the brand is connected to other ideas and feelings in the minds of its target audience. Branding is the art of positioning the brand in people’s memory, making sure it’s connected to the right set of associations – the ones that will make them buy.
Well-branded brands spare the consumer from having to engage in conscious decision-making, by having their subconscious make the purchase decision for them. This is also how companies can increase product sales without increasing product marketing.
Let’s take another well-known brand as an example:
When thinking of sports apparel, most people will have Nike pop up as one of the first brands they think of. The Nike logo will flash before their minds within nanoseconds. How? The Nike branding team has done an exceptional job of tying their brand to your brain’s pre-existing notions of sport and sports apparel. With their slogan, they even managed to take ownership over your inner voice – the one that protests your laziness by commanding that you put on those running shoes and get moving – Just Do It. This powerful brand recall means that they don’t have to put the same effort into marketing each and every of their products. Putting the Nike logo on a pair of yoga tights is enough for you to instantly know that those tights will get the job done.
Connecting the dots
Creating the right brand associations is a long-term process. This is due to the fact, that the meaning of brands is stored in people’s long-term memory. In a world geared towards short-term results, many companies miss out on building their most powerful and sustainable value driver. But, as they say, Rome wasn’t built in a day – and neither was Apple’s $205 billion brand.
Branding takes patience. You can’t fast-track brand associations. Brand associations are the result of people’s experience with the brand. These experiences can be:
- Direct – through use/consumption of the brand
- Indirect – through marketing messaging and the experience of others.
While branding concerns the strategy behind and planning of brand associations, tactical marketing is used to create and reinforce these associations (I will get into the how of this in a future blog post).
As such, branding is not just a fancy word for marketing. Instead, look at it this way: marketing is a very broad field, within which any company with long-term ambitions will have resources dedicated to branding, because while every company arguably has a brand, only the ones invested in brand building will see value added by said brand.
Fun fact: 94% of all our purchase decisions are influenced by others – a demonstration of the importance of indirect brand experience. Social Media is such a powerful marketing tool (in part) because it has managed to fast-track and broadcast word of mouth.
A good read: Neuromarketing for Dummies by Genco, Pohlmann & Steidl.
I’m serious. It might be called “for Dummies”, but it provides a good, scientific overview of the basics of Neuromarketing.