For many, the concept of branding can seem soft. Numbers are tangible and concepts such as brand equity are not – at least not on the surface.
However, there is growing evidence that having a strong brand is a critical component of business success.
A 2012 McKinsey & Co. study found that strong brands outperformed weak brands by 20 percent, and typically outperform the market. Aswath Damodran, finance professor at NYU’s Stern School of Business, is someone who believes in the power of a brand. Several years ago, he compared Coca-Cola to some of its lesser-known competitors and determined that the value of the Coca-Cola brand was approximately 80 percent of the company’s $79 billion valuation. Studies conducted by Harvard and the University of South Carolina have shown that companies with stronger brands outperform the stock market.
Having a strong brand is important. But what exactly is a brand?
Contrary to popular belief, a brand is not the external perception of an organization. And it is not the logo.
In the simplest terms, a brand is what an organization stands for and the unifying theme of the company – the reason the business exists. Ideally, it is a simple concept that is both distinctive and memorable for internal and external audiences. A brand encompasses a business’s value proposition and competitive advantage in the marketplace.
It takes time to build a brand and molding the perception must begin internally. Employees are typically the most important manifestation of an organization’s brand. That is especially true in this social media age, where every employee has a megaphone and is, to a certain extent, customer-facing. Because of this reality, there must be alignment between internal and external messages, and there must be internal buy-in to achieve a connection with prospects, clients, and the wider audience.
It also means that employees – especially salespeople – must be able to articulate your brand. A strong brand is one that every employee feels comfortable with and truly believes. When employees understand, believe in, and support a brand, the entire organization becomes stronger; there is a unifying mission to the organization and it tends to become more cohesive and efficient.
For business owners, understanding this and working toward defining and strengthening your brand is smart business. A brand may not be as tangible as good old-fashioned sales figures, but it can absolutely be a sales enabler and lead to concrete results.
Contact us at 215.441.4600 if you have questions or would like to discuss how this topic may impact your business.