Sunday Dec 15, 2024
Sunday Dec 15, 2024
Wednesday, 17 January 2018 00:00 - - {{hitsCtrl.values.hits}}
exchange.cim.co.uk: In the era of social media, analytics and customer experience, what is the role of brand? We explore why it is still a meaningful concept for marketers, and how it can be woven into a business strategy.
Despite the economic highs and lows of the past decade, top global brands have continued to flourish, and, in many cases, outperform the market. This year, Interbrand reported that the value of the 100 most powerful global brands has grown by 54% in the last decade. In short: brands aren’t going anywhere.
But why does an intangible asset like brand still hold so much value for businesses? The answer lies in its power to differentiate. In doing so, a brand can drive growth, boost sales, expand the customer base – and convince customers to return again and again. The key to harnessing the power of brand is to integrate it into business strategy.
Brand is really a symbol of everything the business stands for, what it promises customers – and, increasingly, what it actually delivers. It works like a shorthand: if you see a BMW badge on a car, you expect good engineering without having actually to drive the car. An Apple logo on a computer might lead you to anticipate high design values and ease of use. Therefore, a brand exists in the mind of customers, its employees and wider society as a set of expectations and perceived values that differentiate it.
Each business must establish the function of its brand through a brand strategy. This is likely to identify external factors, such as customer segmentation, projected consumer needs, competitor offerings and wider market trends. Brand strategy might also cover internal aspects such as culture, ethos, values, or ‘what we stand for’. These factors meshed together express the essence of a brand. Once distilled (perhaps in a brand bible), this can and should drive decision making.
Recent years have seen huge changes in the way people research and buy products and services. This has thrown up challenges to the value of brand as a concept.
One of the most important developments for marketers today is the enormous increase in consumer touchpoints, the places of interface between a business and the customer. Websites, smartphones, Instagram, Snapchat, Pinterest – these all present opportunities for customers to form a perception of your organisation. And, it’s not only about the locations you can directly control; customers will be discussing your products and services on these platforms too, increasingly hidden from view.
This highlights why brand is still very relevant for marketers: brand strategy is the means by which you can bring order and consistency to interactions with customers in a fragmented digital environment. It needs, however, to be interwoven into the overall business strategy in order to be fully effective.
How does brand interact with strategy?
To quote a recent Interbrand report, a brand is “a business strategy brought to life”. In other words, brand and business strategy are two sides of the same coin, and can overlap.
Broadly, a business strategy should cover how the company aims to achieve its business goals and how to sustain competitive advantage. This could also touch on culture, the product or service portfolio, sources of differentiation and pricing. Brand is likely to feed into the business strategy – as an asset that can contribute to the organisation. It’s a delicate balance: a brand sets expectations and the business delivers them. But if the promise outstrips the product, you hit problems. Equally, if the product is strong but the brand is weak, this dictates the area for marketing to focus on.
However, no two organisations will have the same relationship between brand and business strategy. Consider a family-run start-up. This organisation will already have some elements of brand baked in to the operation, such as the ethos, values, and feel for the customer (for instance, through personal contacts), without this being explicitly defined. Here, brand isn’t something retrospective to be enforced after the business strategy has been finalised. It’s already there, interwoven into all aspects of that organisation. But what happens when the organisation experiences change?
This is where the power of brand is revealed. At some point, the business will need to enshrine those ‘naturally occurring’ aspects of brand into a statement or strategy. The important idea is that this remains stable, while the business can accommodate change. Brand, therefore, has a dynamic relationship with business strategy; it can be seen as a means of keeping focused and orientated towards the customer as the organisation grows, develops, contracts or morphs into its next phase.
That doesn’t mean that a brand can’t change too. In a world where customers expect brands to act responsibly and transparently, many organisations are scrambling to adjust how they are perceived, which is a business-driven decision.
The decision to change an established brand needs careful consideration. There can also be a disjunction between how a business perceives its own brand – and how customers perceive it. Indeed, the cost of allowing this ‘brand gap’ to widen are increasing.
But marketing departments that keep asking, ‘what do customers like about us’, and ‘what do our customers want from us,’ will keep apace of these shifting expectations. It comes down to a very simple, very old rule, inscribed by the ancient Greeks on the Temple of Apollo at Delphi: “Know thyself”.
