“Brands are fiendishly complicated, elusive, slippery, half-real, half-virtual things. When CEOs try to think about brands, their brains hurt” Jeremy Bullmore
Written by: Martin Saunders
Brands have been around for thousands of years. Most people think this is a reference to branding cattle – something done to signify ownership. But even back in 2,000 BC, people used symbols on products they made and sold like oil lamps to provide a sense of trust, with some makers able to build a reputation for safety. Although the art and science of brand building have come a long way since then, when we look at contemporary ones such as Volvo and its same safety focused brand, and we can still see how branding as a discipline, taps into the same fundamentals of human psychology.
There are hundreds of definitions of what a brand is. I liked to think of it as simply what promise a product or service brings. It’s perhaps as helpful to think about what a brand isn’t: a commodity. From this comparison, we can see that building a brand is about creating perceived value in customers minds. The options for what form this value takes are infinite, so the key is that it is true to your organisational strengths (and ideally current customer or consumer perceptions), distinctive and compelling to your customers. This last point is important and highlights an area that often suffers from underinvestment and that’s market research. How can you put together marketing plans and strategies if you don’t know what your customers think about you and your products? This doesn’t mean what you think they think, it’s about understanding their thoughts not yours. Between 5-10% is reckoned to the baseline. Options for research are for another day, but if you’re reading this and thinking “but our budgets are infinitesimal” – think of what you’d glean from buying a dozen customers a coffee and asking some good questions or maybe a couple of rounds of drinks.
So back to the question of whether it’s worth investing in building a strong brand. The idea of creating organisational value through measuring brand strength in modern times stems back to 1988 when RHM – the company which then owned household brands such as Bisto, Mr Kipling and Hovis was the subject of a hostile takeover bid. With the help of Interbrand who developed a methodology to value both tangible and intangible assets, they showed the offer was too low and so it was rebuffed. The following year, the London Stock Exchange endorsed the concept of brand valuation with the current split at 80% intangible, 20% tangible a shift from 30% / 70% the other way around that time.
Interbrand now publish an annual survey looking at the value the top brand creates. It aims to define the uplift in revenues on the back of brand strength. Not only do strong brands influence initial customer choice, they also engender loyalty. In the current economic uncertainty, surely those two things alone would be worth investing in? There are a host of other benefits to having a strong brand but perhaps the trump card at the moment is its ability to attract, retain and motivate talent, surely a primary concern of most CEO’s in the current labour market? I’ve seen this first hand at the brewery where I am a Director and where we doubled the team last year while we took on new premises, most of which were for our taproom. I must emphasise this is at a time when hospitality was (and still is) one of the sectors where recruitment is the most difficult post-Covid. We filled every position, and they all remain over a year later.
As you take some time to reflect on whether you and your senior team (because it’s a whole team effort) are dedicating enough time and resource to nurturing your brand. If your conclusion is that you’re not, don’t worry because there are plenty of useful books, online resources and experts in the field.
Martin Saunders is a client of Purple Lime’s who helps organisations build brands to deliver their commercial goals. You can find and connect with him here.