LOGIC FOR A LONG-TERM, BRAND DRIVEN APPROACH TO BUILDING EQUITY
Let’s start with this: your brand is not your logo or your color palette. It’s the perceptions and feelings people have about you, it’s what people say about you to others. Your brand is a relationship first, not a font. To earn that relationship, brands must have meaning, purpose and saliency.
Relationships are what drives behavior, not logos. Behavior, repeated predictable behavior, comes from strong relationships. Behavior equals purchase and future purchases. Simply, it is behavior created by meaningful relationships that drives present value and future potential.
As such, strong brands have greater promise of future performance – or goodwill: the delta between the book value of a business and what an acquirer is willing to pay. Branding builds future promise and protects investments, reducing risk. Branding is the ultimate transaction multiple modifier.
Okay, now that that’s lined up, let’s go here: relationships grow stronger over time. They grow through repeated exposure, engagement, consistency of experience, and relevance. Brand relationships are fundamentally emotionally based, they must have meaning. Yes, they are supported by tangible attributes, but it starts and ends with emotion. And make no mistake, this is equally true of B2B brands as it is with B2C brands. A strong brand has the same positive effect on the potential acquirer. Win the heart, the rest will follow.
Do remember to do the real work, build the foundation: a great brand must first and foremost, be positioned through a clear and definable market opportunity, competitive differentiation, and a unique and sustainable offering before it is ever expressed tactically or creatively. Good brands are always aligned with the goals, vision, and mission of a business, and critically, to the investment objective and growth and exit strategy. Only when this work is done, can you extend a brand into tangible brand elements.
Of course, this probably doesn’t need too be said. But nonetheless: Every great brand demands a great business/service at its core. No brand can save a shitty product or service. Similarly put, a poorly formed brand in the market can kill a great idea. There are no shortcuts, it all has to work together.
Better With Age
There is an abundance of data confirming the benefit of frequency-over-time’s affect on building preference and purchase intent. Today, frequency of exposure includes all areas of engagement whether digital, POS, social interaction or VR/AR. When brand position is delivered clearly and consistently across all channels and all brand touch points, the compound effect is significant. And frequency matters. Studies show that repeated statements are perceived as more truthful than statements made less frequently, “because repetition imbues the statement with familiarity.1” Frequency-over-time breeds familiarity and familiarity breed trust. Trust builds relationships and long-term value. That’s where the goodwill is buried.
In addition to the power a strategically-grounded and creative brand has to dominate a market, it has wide ranging benefits across an organization. These benefits also grow over time. For employees, working for a well-defined and authentic brand adds to a needed sense of purpose to be involved and contribute to something salient and meaningful. To make a difference. A strong, well-articulated brand supports leadership in contributing to enterprise alignment across strategy, operations, communications and development. Strong brands attract the best talent, turnover drops. People stay. Brand is a leading contributor to employee engagement, satisfaction and productivity. Strong brands infuse organizations with energy and focus.
The market benefits of a strong brand are too vast to list here, fodder for another post. Suffice it to say, great brands enjoy a wealth of advantages; premium pricing, successful line extensions, long-term loyalty, protection from market fluctuations, protection against competitive threats, higher perceived value, increased trial, greater advocacy… the list goes on. Invariably for brand driven companies, all of the benefits of a strong brand grow exponentially over time.
If the foundation is strong and you are brand driven from day one, you will dominate your space, generate outsized growth and maximum return on equity. And if you’re looking at a liquidity event, it will surely improve outcomes.
To chew on:
From BrandZ’s 2018 Global Top 100 study2, methodology by KANTAR Millward Brown:
“Brands with strong meaningful difference tend to grow, while those lacking meaningful difference tend to shrink. The data also confirms that on average, brands which grow salience also grow market share”1
“Between April 2006 and April 2018, the value of the BrandZ™ Strong Brands Portfolio increased 172.1 percent, and the BrandZ™ Strong & Innovative Brands Top 20 Portfolio increased 226.7. The S&P 500 and MSCI World Index grew only 102.0 percent and 50.3 percent, respectively.”
“Brand building spans every consumer touch point from initial awareness to engagement, transaction, and ongoing conversation.“
“The key takeaways for brand owners and brand marketers are: companies that invest in building valuable brands grow their topline faster; and organic top-line growth is the greatest determinant of total shareholder return.”
I highly recommend downloading BrandZ’sTM report here, it’s great work. The data covers the big boys, the top 100 global brands and is rich with insights on branding across all sectors/categories. Big boys aside, psychodynamics and human nature are consistent and a brand’s ability to incrementally increase value holds true for enterprises big and small.
So start early, put brand at the center of your strategic thinking and make “Brand Driven” your way of doing business. It’s the best way to be sure not to leave any money on the table. Need some help getting there? Let’s connect at www.BRANDThink.biz, purveyors of a uniquely capitalistic approach to brand strategy.
I’d love to hear your thoughts, ideas, likes or dislikes. Please do comment. And if you found the read valuable, we’d be grateful for a like and share.