CEO Best Practice: Branding

Executive Tools

• Executive Summary
• Self Assessment Checklist

Expert Practices Articles

• Branding: An Overview
• Brand Strategy
• What Is Your Brand Worth?
• The CEO as "Brand Champion"
• Positioning the Brand
• Extending the Brand
• Online Branding

Tools & Analysis

• Are You Reaching the Valuable One Percent?
• The BrandMindset ® IQ Test
• Customer Service Altitude Test
• A Branding Case Study: Miller Electric

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Branding: An Overview

According to Vistage experts Duane Knapp and Tryg Jacobson, these are all elements of branding, but by no means the whole story. In fact, they contend, the notion of branding is misunderstood by even the most marketing-savvy organizations.

"Branding represents the intangible part of your business," Jacobson says. "Products are tangible. They're made in factories and stored in warehouses; they're things you can hold in your hand. A brand, by contrast, is a collection of intangibles -- ideas, feelings and word associations. These intangibles reside in the real estate of your mind."

"A brand must stand for something larger than just a product benefit," adds Knapp. "It represents a value proposition. Consumers choose one particular brand over another because of this intrinsic value."

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What is Your Brand Worth?

"Brand equity is the totality of the consumer's perceptions," says Knapp. "This includes the quality of products and services, the company's financial performance, customer loyalty and satisfaction. It's all about how consumers, employees and other stakeholders feel about a brand."

Adds Jacobson: "A brand equals trust. To build trust, you need a perception of value and a promise of quality. First you create value, then you deliver on it."

The brand serves as a valuable tool for consumers forced to choose among the bewildering array of products and services in the marketplace. Consumers depend on "signals" that a brand sends out -- those intangible associations with quality that it represents. Therefore, it's up to the company to carefully influence and manage those signals at all times, in all encounters with their target markets.

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The CEO as "Brand Champion"

Every business needs a "brand champion" -- an individual charged with the authority to ensure that a consistent message crosses interdepartmental lines throughout the organization.

"This person should be responsible for clearing internal communications and/or designing corporate specifications for marketing, sales, administration, personnel and so on," Jacobson says. "This way, even if all materials aren't being cleared by him or her, guidelines and procedures are in place to ensure that a consistent message is being delivered."

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Brand Strategy

Although strategies differ in tactics from industry to industry, a brand usually develops along these lines:

1. Identify the message. A company defines a core message by identifying the distinctive value of its products and services -- why its customers care about what it has to offer and what makes it different from its competitors. "The core statement for FedEx is faster, better service," Jacobson notes. "For Nordstroms, it is flawless customer care. For Nike, the core statement is high performance on the cutting edge."
2. Build the message. When the distinctive value is identified, it must be framed in a succinct message people can understand and relate to. This will reinforce the core value of the products and services.
3. Promote the message. What good is a message if no one hears it? The company must make a strong pledge to aggressively market its product and, over time, to solidify its image (and its associations of quality) in the minds of consumers. "Determine what you do that your competitors don't," Knapp says, "and hit that theme hard - again and again. Find the line, the phrase, the image that defines your company and use it."

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What Is Your Brand Worth?

"Brand equity is the totality of the consumer's perceptions," says Knapp. "This includes the quality of products and services, the company's financial performance, customer loyalty and satisfaction. It's all about how consumers, employees and other stakeholders feel about a brand."

Adds Jacobson: "A brand equals trust. To build trust, you need a perception of value and a promise of quality. First you create value, then you deliver on it."

How does a business develop the perception of value? Start with quality. Of course, all businesses claim that their products and services have quality. But in the rigors and demanding circumstances of the marketplace, consumers quickly learn which products have genuine value and which ones don't.

"A business must understand what quality means to the customer, and develop a culture and quality improvement process that supports this understanding," Knapp says.

Jacobson agrees. "Quality, like beauty, resides in the eye of the beholder. To generate brand equity, a business differentiates its products from others in terms of customer benefits. Then it aligns all of its marketing and advertising efforts with what it actually delivers. Over time, a relationship grows between the company's brand and the customer's experience of that brand."

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The CEO as "Brand Champion"

"Many companies have advertising that looks one way, marketing materials that look another way, separate corporate offices with different business cards, signage that differs from one locale to the next. This is exactly not the way to maintain brand discipline."

Instead, he says, what every business needs is a "brand champion" -- an individual charged with the authority to ensure that a consistent message crosses interdepartmental lines throughout the organization.

"This person should be responsible for clearing internal communications and/or designing corporate specifications for marketing, sales, administration, personnel and so on," Jacobson says. "This way, even if all materials aren't being cleared by him or her, guidelines and procedures are in place to ensure that a consistent message is being delivered."

And while the CEO isn't necessarily the right choice to serve as brand champion, nonetheless he or she must act as a strong advocate of brand discipline. The CEO should always be seeking ways to make the elements of the company's brand more meaningful.

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Positioning the Brand

Flourishing brands promise specific benefits and deliver on them consistently. Wal-Mart promises low prices on quality merchandise. FedEx promises dependability that customers can track. But, says TEC branding expert Duane Knapp, the brand position is not achieved by a company's marketing staff. The real positioning is done by the customer himself.

"Marketing and advertising efforts send out signals a company wants to instill in the consumer's consciousness," he says. "But it's the customer who weighs those signals against all the other signals being sent out by competitors."

One effective positioning technique is to "own" a word or phrase, notes TEC branding expert Tryg Jacobson. "Stake a claim to a powerful benefit provided by your product or service -- something that sets you apart from the competition. In essence, this word becomes the foundation on which you build the customer's perception of value."

Jacobson illustrates the point by examples of one- to two-word positions claimed by the toothpaste industry:

• Crest - "cavity protection"
• Colgate - "whitening"
• Close-Up - "fresher breath"
• Aquafresh - "tartar control"

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Extending the Brand

"A brand extension works if the new product follows and enhances the promise of the original brand," Knapp says. "All too often, however, the necessary 'brand discussion' doesn't take place, and the organization ends up selling something different with a similar name -- a product or service no one really wants."

Of course, there are compelling reasons to explore brand extension. "In general, a business extends into different categories when it has a distribution channel already in place," Jacobson observes. "It represents an opportunity to move beyond the loyal customer base and reach new markets, or to forestall a similar effort by competitors."

Extending a strong brand has other benefits:

• Increased visibility of the parent brand
• Immediate consumer recognition
• Lower costs for new product releases
• Opportunity to penetrate new, emerging markets

Says Jacobson: "In the best circumstances, a brand extension can revitalize the existing brand, increase its equity and discourage competitors from entering the market."

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Online Branding

In many ways, online branding closely resembles the branding process in the physical world. According to TEC branding experts Tryg Jacobson and Duane Knapp, the underlying principle remains the same: the brand represents a promise of quality to customers and a commitment to deliver on that promise time and time again.

In Knapp's view, an e-brand consists of these key elements:

• Distinctiveness. The Web site and its brand possess unique characteristics.
• Perception. It is perceived as a distinctive brand by the target audience.
• Benefits. Customers derive functional and emotional benefits.

"The always-open-for-business nature of the Net offers a unique opportunity for the brand to embrace a true 'customer convenience' mentality," Knapp says. "Amazon.com, for example, is built on this fundamental promise: We make the purchase of products faster, better and cheaper than anyone else."

The online goal, he adds, is making all brand activities, products and services available to the audience whenever and wherever desired. This requires the ability to respond to inquiries within one business day and, if possible, to provide live assistance around the clock, seven days a week, 365 days a year.

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