But on review, we've not got into the point of brand and why you should be bothered with it.
Even if you feel your business is on board with brand, more and more as we kick off a new project, we're putting forward our definition as to what brand is and why you should care. Brand means many things to many people, we want to get everyone on the same page on brand. But, more importantly, I want to help you explain it to those who are more skeptical than you on how brand can support a business.
If you're dealing with someone in the organisation who places brand in the domain of the well-worn phrase, "Colouring In Department", it can be tricky to know where to start. How do you collect all the terms that the word 'brand' is prefixed with and make sense of all that to someone who doesn't believe?
What does brand do? Well, let's start with what it doesn't do. Brand doesn't engage. It doesn't recruit. It doesn't sell. It associates attributes that you want people to know about your business. As an example, look at the recent Hermes rebrand to Evri. The associations that Hermes had with customers were probably becoming an issue, getting in the way of the business strategy. Too toxic. How do you save that business? In this case, change the name of the brand, throw in a new logo, some new colours. The question is, is this approach a foundational shift or a way to distract customers from the existing bad associations around Hermes?
It's the same issue that Facebook faced. Every news mention of Facebook was becoming more and more contentious. The association of the company name, Facebook, was beginning to impact the performance metrics of the product they get their income from, Facebook. So, they needed to put some space between the legal entity drawn into the US Senate over the January 6th uprisings and the product they sell. And, voila, Meta was born. A heatshield to protect the cash cow.
It's the associations that a brand conveys that adds value to the business. If you're a B2B company looking to move into a B2C space, do the associations that the brand represents make it feel like a serious contender in that space? For example, can you see Salesforce open a fried chicken restaurant? The brand doesn't feel that it could be taken seriously there. Interestingly, Tesla has built a brand around the associations of being innovators but also of being, and excuse me while I'm a little bit sick in my mouth, mavericks. If Tesla announced a chain of fried chicken restaurants, it would be a surprise, definitely some kind of stunt, but the brand can shoulder that stretch.
These associations that you place onto the brand allow you flexibility in two main areas — market share and margin. For example, Apple (I know, sorry) has a pretty low market share for desktop PCs, around 8%. But Apple holds 60% of that market's profits. In a saturated market, Apple has increased the brand's market not in volume but in value. That's the power of brand at work.
Brand is a key driver to build market share. Growing market share has been the space many tech firms have occupied, especially in their early years. Spotify has been building market share with its brand but has never published an operating profit. Their current model is to grow market share, and over time they'll be able to generate a profit. As long as investors see market share go up, they'll let Spotify forego profits.
Of course, market share growth isn't just the purview for modern-day tech unicorns. For years, this battle for market share has been raging between two brand giants. Coke and Pepsi have been using brand to build market share over each other for decades. Associating themselves with Christmas or with music or whatever will give them an edge to build market share with a low margin product. Every 0.5% of market share translates to big bucks on the bottom line.
This hard, commercial viewpoint of brand sometimes doesn't fit well with third sector clients. But the principles are the same. Charities need to command a sense of market share; otherwise, people won't donate their time or money to their cause. And you can look at 'higher margins" as 'higher donations'. It's not dirty; it's the facts around how you can make the most of the opportunity.
Looking at the tangible way that brand builds a business reframes what brand is to most people. It's usually viewed through the point of engagement: , a banner ad, a poster, a logo. But the decision to identify the purpose behind that brand execution should happen in the boardroom.
We're trying to find a way to explain brand to the skeptics. To those that think brand equates to an expense rather than an investment. We start any new engagement by stating that every business is built on the architecture, the associations that it has, its identity, and that all ties into implying value for a business. This brand position, in turn, serves as a north star for a business's strategic direction.
Implying value is the keyword for me here. Apple certainly signifies high-end, high-cost products, but they have to back that up with products that they feel a particular group of people will pay for. Apple could have all the fancy advertising in the world, but if the iPhone kept crashing or felt inferior to other phones; it would all count for nothing. The brand would fall on its arse. The Hermes/Evri rebrand will be a waste of time if they don't address the underlying issues that created the toxicity in the first place. Brand implies value, but the product or service is the proof point that backs the brand associations up.
Brand is not a logo or fluff. It isn't performance marketing, but performance marketing does rely heavily on solid brand associations. Brand strategy is business strategy. If this doesn't start to make those sceptics take another look at brand, maybe, it's time to look for another organisation that gives a fuck.