Brands have value. That’s no secret.
When your name and identity holds even a hint of awareness, recall or loyalty, then it’s undeniably an ‘asset’ – of sorts. If not literally sitting on the balance sheet, it’ll be there quietly helping drive your day-to-day sales or underpinning your share price.
Design folk like us sometimes call this Brand ‘Equity’. Which sounds simple enough. The trouble is, measuring it and planning around it is anything but. And if you get it wrong, the consequences can be disastrous.
Why is it so hard?
Some briefs aren’t just about design. In branding, many carry hefty business implications and considerable risks.
Should your refresh be an evolution, or a revolution? Does your business need a new name, to grow digitally and globally? Should your killer new product or service have a sub-brand of its own? Should you keep the brand of the company you’ve just acquired?
These questions don’t just influence creative. They shape the strategic direction of a business. And they’re founded on judging just how much equity is locked up in the brand you have, and what impacts there will be should you change it.
And what makes this such a minefield is the risk attached to getting it wrong.
If you consolidate a brand portfolio by retiring smaller identities, the savings can be colossal. Plus you increase your chance of growing one, more powerful and diversified brand for the future.
However, tinker unwisely or too deeply with a successful brand, or even kill it completely, and you risk audience abandonment, corporate backlashes and sales decline.
It’s a high stakes game.
An uncomfortable brand truth
Having worked on these kinds of projects down the years, there is a key learning. Just because a brand is well known, sells well and is even loved by many – it doesn’t mean that it's the brand driving sales.
Yes, some brands contain undeniable value. You don’t buy a Prada bag for the quality of the leather. There are plenty of good coffee shops, but the queue in Starbucks is always longer.
But, there’s a flipside. I may have heard of BP and Shell, but their ‘brands’ play little role in my purchase choice. When I need fuel, I need fuel. I go to the closest, or the cheapest.
This is why measuring equity can also be painful. The truth is, most brands probably don’t have the value their own marketeers, sales teams and (in-particular) founders think they do.
Most people rather make their choices based on a far less romantic rationale: availability, ease, circumstance and of course, value.
Yes your brand may be well-known, but maybe people are just buying from you because the product or service is great and easily available.
The simple test is – if you covered up the logo, would people buy it anyway?
A good example
An apt case in point is playing out in the UK banking sector.
A decision has been made by Clydesdale and Yorkshire Bank’s Australian owners CYBG to gradually rebrand both as Virgin Money. A decision which seems extraordinary – if you’re from Scotland or Yorkshire. Hundreds of years of combined heritage, household names in their home markets and thousands of loyal customers. Surely a slam-dunk for brand equity?
But then ask those difficult questions. Would their respective names attract you to change bank? Are they globally scalable? Why is it that the Virgin Money brand is growing faster? Brands are there to drive business, not the other way around.
It’s trickier than it appears.
Navigating the minefield
There is no easy answer. Making these judgements is not something business leaders can rush when they write their strategies. But here’s some advice from us on how to start:
- Don’t make assumptions. What often kills effective strategy work are too many sweeping statements, not backed up by evidence. You don’t know a brand is strong unless you’ve measured it. Remember the old adage: shit in, shit out.
- You are not the best judge. If you’re working within a business, then you cannot hope to have a fair and accurate viewpoint of its strengths and weaknesses. Seek external advice. Then listen to it.
- Do your field work. Lazy research is the next biggest killer to great strategy. If you want to know what your audience thinks – you have to ask them. Yes, it will be expensive. But otherwise, you’re flying blind.
- Don’t forget the internal audience. Companies are driven by people, and brands are powered by culture. So talk to your staff. Use their knowledge. If you bring your stakeholders with you, from the top to the bottom, it makes the launch a whole lot easier.
- Err on the cautious. It’s pretty easy to say ‘be brave’. But business is not a game of chicken and peoples’ jobs are on the line. Most brands move slowly and take a long time to change direction. So unless you have rock solid evidence than a drastic strategic change is needed, then careful evolution is usually the smarter choice.
How much real value your brand has, and what impact that has on both creative work and business planning, is rarely black and white. But if you do your research, ask the right questions and have the due diligence up your sleeve, you’ll be in a much stronger position with it, than without it.
If you want to talk about your business, brand or challenges, give us a call.