What Brands Can And Cannot Do

Mark Di SommaOctober 8, 20155 min

Some searching questions recently from executives who seem to pride themselves on being brand skeptics prompted me to review the parameters of what brands can do, what they can’t and why I still believe that branding is a vital business activity.

Let’s start with what brands can do well. A strong brand can help you add or retain perceived value in pressured markets. It can help build trust through identity and reputation. It can inspire loyalty and a strong sense of social community. A brand can promote ideas that people are inspired by, and a strong brand can help a company recover more quickly from a setback. All up, the real power of a brand is that it provides shortcuts in decision making and increasingly a congregating point for consumers in marketers where there is too much choice, too many claims and too little time to process fully.

But brands also have limitations. They are not a cure-all by any means. A brand won’t save a bad product nor will it save a bad company (although it might give that company an asset to sell). Equally, brands don’t persuade. That’s the role of marketing. So a brand in itself won’t convince people. In fact, it requires ongoing investment to have and keep its value. And, as Mike Anthony and I discussed recently, that value is easily over-estimated. As marketers and branders we tend to think that brands are more important and more conspicuous in people’s lives than they are.

Brands Are Fluid

The nature of brands is changing. More and more, brands are the signature for the experiences they provide, and that’s all. A nice piece from Glen Llopis on this: “Consumers are no longer brand loyal. They may be loyal to the engagement experience that a particular brand offers. Once the experiential elements of brand engagement disappear, in many cases, so does the emotional connection consumers have with the brand that was providing them that unique experience…If a brand focuses more on trying to sell consumers their products/services rather than finding ways to creatively engage with them and solve a need, their brand will be short-lived.”

I get the frustration. For those who find brands hard to trust as assets, the whole concept of branding can appear abstract and anecdotal. Pragmatists struggle with the lack of hard evidence and the faith that marketers have in symbols and associated ideas to generate hard currency. I wish we could all find better ways to make the business case. I wish brand could be more obvious and quantifiable than it is to many.

Brands Are The Summit Of Value

However, the question I keep coming back to is – if not brand, then what? How do you build a strong, margined business today without robust intangibles? I don’t think there is any other way to find unmatchable value than through brand story and brand experience. Yes, every company can continue to streamline and downsize to get the efficiency gains, but service, product, systems, even people are all temporary advantages that competitors can often act quickly to match or beat. IP is important, but even then, it could be argued, it needs to be branded to achieve recognition and command a premium.

I hear a lot too about the fact that the world has enough brands already and that the plethora of marques defeats the purpose of having, or at least investing, in any more. Yes, there are huge numbers of brands – but, frankly, most of them are not that good. They’re too functionally bound. Or campaign driven. Or focused on short term gains at the expense of sustained value. “Creating a perception of difference may seem difficult in today’s competitive environment,” says Nigel Hollis in this article, “yet BrandZ finds that four out of 10 brands around the world manage to differentiate themselves to a significant degree.”

Entirely my point. The majority of brands are not distinguished. Actually, I think that figure seems high. It doesn’t seem like there are that many brands doing brilliant work. How many brands can you quote that have an amazing, clear and compelling brand story? How many brands do a very good job of distinguishing themselves from everyone else around them? I don’t think it’s anywhere near 40%. There are a lot of brands going through the motions – checking boxes and trying to convince their senior teams they have what they need to win. But brand, like strategy, is an over-perceived advantage. Far fewer have it than give themselves credit for having it.

So, I keep coming back to my question – How else are you going to add value beyond what the market naturally gives you? You can expand, but you’ll need a brand to do that. You can merge or acquire – but, again, without a brand to sell or gain, you’ll leave money on the floor. You can build products, but they need to be branded unless you want them to be OEM, commodities or house brands. Reputation means nothing until it is focused through an identity that people recognize and look for. There may be a lot of brands, but I don’t think we’re close to topping out the potential of brand advantage.

The Greatest Asset Outside Of People

The onus is on brand owners and brand strategists to frame and monitor brands in ways that treat brands as assets, whose effectiveness and investment is judged on their ability to generate margin and leverage reputation. Less about icons that have value attached to them. And more about assets that have icons attached to them. The design community won’t thank me for framing brands this way but perhaps it will change the questions, and the arguments, directed at brands from those responsible for prioritizing business investment.

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Mark Di Somma

2 comments

  • Eric Wedemeyer

    October 8, 2015 at 7:26 pm

    Excellent points. Brands are hard to put a number on, but where else is the added value going to come from? If brands were lifted out of Marketing to assume a higher role in guiding execution of corporate strategy, perhaps the value of the brand (speaking of the organizational brand, of course) would be more apparent. I doubt if brand-driven companies like Disney, BMW or Apple worry too much about whether their brands are delivering ROI.

  • Hilton Barbour

    October 11, 2015 at 7:17 am

    Excellent summation on the power (and necessity) of brand building efforts. Sadly, as we watch the immolation of VW in the press, the one point perhaps missing from this is vigilance and commitment. Brand building isn’t a sometimes exercise, its an always exercise.

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