• growingdale


In my 30 years of experience in communication and 15 years of experience in branding, I have come to the conclusion that branding is the most misunderstood discipline in companies. Everyone seem to know something, yet most of the things I hear are plainly off track. Here I sum up the most common misconceptions about branding.

You need a budget to do good branding

Actually, you need zero euros or dollars for branding. You need a budget for marketing, PR, product design, customer care, after sales, etc…but not for branding. Branding is all about how you do your marketing, PR, products design, customer care, aftersales, etc… Branding is about the choices you make and the attitude you show in everything. You don’t need a budget to make choices or to adopt a certain attitude. Choices and attitude that reflect the DNA of your company. At the most, you need to pay someone who guards the brand. Yet, this is more the case for big companies. Company owners should be the best brand managers. Let me put it this way, you don’t need a budget like you do for marketing, HR, etc…for branding, but you must be willing to pay a price for the choices you make as a brand.

Branding is the responsibility of the marketing or PR department

Nope, every department impacts your brand. Branding is not a discipline belonging to a certain department. Every department can make or break your brand. People may fall in love with your brand, yet if your receptionist behind the phone gets rude with a customer, you can kiss your customer, and your brand equity, goodbye. Branding is everyone’s responsibility. Every department plays a part in the story of the brand. A brand is a holistic concept and each part affect the whole.

CEO's should not be bothered with branding

Really? A brand is the highest intangible value a company has. In the best case, a brand has more value than hard assets. Often CEO’s will divert you to the marketing manager to deal with brand issues. Branding should be on top of mind of the CEO and the Board. It is the reputation of a company that is at state. A CEO who is not concerned about branding, is a mercenary. He of she is not concerned about what connects a company to its customers — the brand. A brand is nothing something you stick on a product or service. A brand is the soul of company.

Branding is defined by the consumer

OK, lets demystify this one. I have heard companies telling me that they issued a market research to define their brand. Lets follow the logic here. You ask a group of people who represent the market how they would like your brand to look like. What they will answer is a reflection of their needs or likes. Now, let suppose your competitor does the same exercise and inquires the same sample. What do you get? Of course the same answers. So both companies will create a brand based on the same wants of the consumer. Result? Look-a-likes. Do you now understand why most FMG brands are interchangeable? The more interchangeable brands are, the less value they have.

Branding is the story behind a product of service

Actually not. These stories can be invented just to appeal to the customer. That's called image building. No, branding is the story behind the people who created the products of the services. Branding is the story behind why they created it and how they created it. Branding is always about people. People make brands, they break brands, they like and dislike brands and they buy them. If you take people out of the equation, you end up with nothing. Branding is a covenant between those who offer and does who acquire or give. The brand is the crystallisation of all the promises one can expect.

Branding is another word for Corporate Identity

An identity is the expression of something. The world identity has the same root as identical. In other words, identity is the expression of who I am. Corporate Identity is the tangible expression of a brand. The brand is the soul and Corporate Identity the body. Corporate Identity does not tell you which choice to make, though is the expression of a choice. Corporate Identity serves branding, yet they are not the same. If Corporate Identity is considered to be branding than the outcome is that branding becomes a set of rules instead of principles. Rules limit creativity, while principles stimulate creativity.

Branding does not deliver tangible value

This is a tantra I heard many CEO's chant. Yet it is an easy misconception to debunk. If branding does not deliver value than it should have no tangible impact on the revenue of a company. Let’s do an easy test, a negative test. Engage your company in some bad branding — I mean really bad. Break every promise you make and tell your customer they misunderstood the promise. Make sure that your products and services are mediocre and interchangeable. Do this for three months and then take a look at your balance sheet. Yep, profits will drop like ripe plums. If bad branding can generate tangible loss, why should it not deliver tangible value and profit?

Let’s ask the question, how much value does a customer have? What if you loose that customer? How much money do you need to invest in order to make a new customer? What if a customer is unhappy with your brand and persuades others not to buy your product. IOn the other hand, what if a customer is crazy about your product, how many customers will he of she persuade to buy your brand? No value? A brand gives you power to perform and to build up customer capital. Research has proven that brand-driven companies make more profit.

Brand Equity is hard to define

I can sympathise with this claim. There are many definitions out there that sound very academic though they do not strike a cord. Brand Equity is not hard to define. The word equity means value. My definition is more that of a law, 'the law of value’. Brand Equity is the value of your brand as a result of the level of unexchangeability. This means that the more a brand is exchangeable, the lower its value is. The lower the investment one wants to make, the lower the commitment. This definition is based on the law of scarcity. It states that when more of the same is on the market, the value will be lower. Brand Equity is just that. If your brand is similar to another brand, its Brand Equity will drop. If you want to increase your Brand Equity, just make sure that your brand is unexchangeable.

Branding is related to products and services

Who will customers call when your products and services don’t deliver? Who will customers hold accountable when your products and services cause damage? Your company of course. Yes, your products and services are vehicles of your brand. They deliver what you promise, but branding is all about your company. If your after-sale sucks, than your product or service will be abandoned. Unless of course you are the only one offering that specific product or service. In that case you have a high circumstantial Brand Equity. But as soon as circumstances change in the sense that there is a second player on the market, you will see how volatile circumstantial Brand Equity is.

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