A listener, Irene Beard, is starting her own company. She’s always believed in a strong brand, but how can she plan what people take away from her brand? Since we discussed this on a recent podcast, and I thought many of you might have the same problem, I thought I would also share our insight on this topic here.
Before we get into that, I thought I would mention that Beard contacted us as part of our “I’m in a pickle!” feature, where listeners write or call us regarding a business problem they want our advice to solve. If you have a topic you would like to discuss with us, don’t hesitate to get in touch with us here.
The excellent news for Irene is that she is already on the right path. She thinks of brands appropriately, and not everyone does. Brands are a tactic we use, which is different than strategy.
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A company needs a few things before they have a brand. For example, there should be a goal for the value you deliver to customers. Having that goal requires choosing your target customer and positioning your offer, determining the value it provides. These are examples of things that need to come first. Otherwise, you risk having a brand with a clever name and a fantastic logo and not much else.
Your brand is a tactic. It’s a way of creating and communicating value to your customers. In other words, it’s just a tool. So, if we make our brand independent of our strategy, we leave a significant tool in the toolkit instead of using it to deliver value.
History of Branding
The first brand began with an English tea company. They began marking their product so people knew where the tea came from. This instance of “branding” was a first in product development.
In the early days of branding, companies would mark a product to indicate that it came from them, like how ranchers do with cattle. Later, the concept of a brand developed to serve as provenance, signaling a level of quality and where to go if something was wrong.
Brands today have evolved even further. The brand’s reputation and consistent quality create value over and above the product. This approach is beneficial if the competitive field is relatively constant on the product side. Having a better brand might provide value to customers.
The Branded Boot
Years ago, when my son was young and playing community soccer, he wanted the soccer boots (or cleats for those of you that call football soccer) David Beckham wore, the Addidas Predators. As you can imagine, these boots were expensive. As my son was around ten then, I was reluctant to spend a ton on soccer shoes that were unlikely to see the same action on the pitch that Beckham’s did.
I reasoned with my son that these boots would not make him a better player. However, he persisted, as ten-year-olds will.
Eventually, I realized that the thing these boots would do, besides draining my bank account, was make him feel more confident. I reasoned that feeling more confident would lead to him playing more confidently. So, I bought them.
In this example, the brand’s reputation, that the boots were good enough for Beckham, felt like it could change my son’s self-identity into a more confident football player. This evolution of brand from identifier to provenance to reputation and value has led to four value areas for brands.
The Four Value Areas for Brands
So, when considering the sources of brand value and what you want people to take away from that, consider the following four areas of value a brand can provide. These include:
- Functional Value: This area is the quality signal value of the brand. It usually helps define an indefinite feature like coolness or reliability. Many times, functional value is your reputation, which is how your less technically inclined customers find you and buy from you.
- Emotional Value: This one is about how the brand makes you feel. It can make you think differently about yourself by owning it.
- Social Value: Social value allows you to be a part of a community. The owners of the brand feel a connection between them, which leads to a feeling of belonging to the brand in a way.
- Lifestyle Value: This area indicates when a brand becomes part of a person’s identity; owning it helps define you as a person.
To clarify, Functional Value isn’t a technical spec, although that can be part of it. When the buying decision is technical or easily observable, the brand won’t matter as much anyway. Functional Value is more about things that are harder to define.
For example, Apple’s reputation is that they are easy-to-use, intuitive systems. There are technical specs behind that, but those aren’t the concern unless you are a hardware and systems expert. So, people accept that they are easy to use by reputation and use that as an attribute they consider in their buying decision.
Moreover, sometimes Functional Value is critical, even when the brand scores high in another category. For example, Ferrari has a lot of Lifestyle Value for many car enthusiasts. However, the Functional Value deteriorates as the customer ages. I saw a social media post that highlighted this a while back. Many people dream of owning a Ferrari all their lives. But by the time they can afford it, they are too old to get out of it.
Here’s another one called Sports Car Grandpa.
A brand can be good at more than one thing. The motorcycle brand Harley Davidson is a great example. They have a reputation for a quality product, people like how the bikes make them feel when they drive them, the motorcyclists share a robust and diverse community, and being a Harley-rider is a definite identifier for your lifestyle. The brand has done such an excellent job with its branding for its primary product that some people, people who don’t even own a Harley, buy their other products, like clothing.
Harley Davidson scores high in all four brand value areas, but achieving the same does not require a brand to provide value in all areas. Brands should be strong on at least one of those. Bic Pens are very good at what they do, so their brand builds upon that.
Another example of a brand that doesn’t excel in all areas but still has a great brand reputation is Hanes T-shirts. They were one of the first brands that took out the tag. Before that, they changed the collar design so it wouldn’t wrinkle up when you washed it. These modifications improved their function as a T-shirt, and that probably meant that the people who wore them felt more comfortable, which made them feel good about wearing the T-shirt. That’s the first two areas of value, Functional and Emotional.
What Hanes likely doesn’t provide is Social or Lifestyle Value. Hanes isn’t a community-based product, nor do they help define people to themselves and others. No one is getting together somewhere in South Dakota to celebrate being a Hanes customer, nor do they name-drop their undershirt brand on social media or to a prospective mate. Nevertheless, Hanes is a successful brand and has been for a long, long time.
Determining who your customer is is essential. Then, you know where you want to go with the value you provide.
It’s also important to recognize that it’s difficult to launch a brand that excels at multiple things on this value scale. Most brands start off trying to establish their value in one place, which is usually functional. Then, once a new brand establishes itself, it can build into new areas. While a brand doesn’t need to start off with Functional value, they do need to start somewhere.
Moreover, no matter what you do, you will build a brand or a reputation. The question is whether you are deliberate about it and taking action that supports all of that.
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