A company’s brand can be thought of as the sum of all of its customers’ experiences with its products, employees, physical locations, etc.
“Brand is especially important for businesses in the service sector because what they do within their industries is similar across firms,” says Ryan Barringer, senior vice president, marketing and brand strategy, at Bridge Bank. “Banks, for example, provide customers with access to credit or capital so they can achieve their goals. That’s true for most banks, so it’s important in a financial services context to determine how your brand is different from a competitor’s and how you leverage that difference to stand out.”
Smart Business spoke with Barringer about the benefits of establishing brand differentiation.
What are the benefits of having a strong brand?
A strong brand makes it easier for customers to make buying decisions and serves as a shortcut in the process. Strong brands can be considered assets that have future earnings potential. If a firm has a strong brand it can serve almost as a guarantee of future business and it can help unify employees of a company under one strategic approach.
Which kinds of firms can benefit the most from having a strong brand?
All companies would be well-served to think through how they are different from their competitors. Firms that compete in undifferentiated markets or business sectors can especially benefit from a strong brand. Professional service companies such as CPAs, law firms and hospitality companies are providing the same service, but the delivery of that service can help them differentiate and earn more business.
Conversely, for firms competing in commodity markets, say for instance wheat, a brand isn’t going to help much because as price takers they sell based on what the market will pay. For price setters in undifferentiated markets, however, there are tremendous opportunities to use brand as a competitive advantage.
How can companies measure brand value?
Brand consultants have created proprietary systems to assess the financial value of a company’s brand equity, but this can be quite expensive. And while the accountants do not have a defined method for measuring brand as an intangible asset, new methods are being designed as part of International Financial Reporting Standards. What is most important is for companies to try to understand what role their brand plays in the decision making process of their customers. They can engage in market research with existing customers — ask about their perceptions of the brand and compare those perceptions across competitors.
Companies also can create a brand report card that measures different aspects of the brand, such as how integrated and consistent are its marketing messages and whether its operation is delivering on the promise it makes in its marketing. There are great examples of scorecards, but companies really want to track brand perception and performance over time.
Another easy way to get a grip on whether a brand is a source of future business is to ask customers if they would recommend the product or service to a friend. It’s called a Net Promoter Score, used by many firms to measure loyalty, which can help to indicate a strong or weak brand.
Smaller to mid-size companies that haven’t adopted brand management, as a formal competency, should take it seriously. It’s an investment with future dividends and something to aspire to over time.
How can businesses build their brands?
First, realize a brand is not a logo, color scheme or a tag line, but it’s the summation of all experiences or brand touch points — all the ways a customer interacts with your company builds brand perception. Map out all these ways and make sure each touch point aligns with a company’s true brand essence. (This supposes that the company understands the meaning of its brand from a variety of perspectives including its employees, customers and target market.) Every time a person interacts with a company it’s an opportunity to reinforce or detract from brand values. Breaking it up into small experiences and ensuring they all integrate well and send the same message is a great way to engage in brand building.
Ryan Barringer is senior vice president, marketing and brand strategy at Bridge Bank. Reach him at (408) 556-8677 or firstname.lastname@example.org.
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