The Basics Of Branding For New Entrepreneurs

For new entrepreneurs, branding is often seen as intimidating or something to be dismissed as an “old-style” marketing strategy that is less relevant today. In this article, I’ll explain branding as simply and easily as possible. More importantly, why I feel it is still very much the cornerstone of marketing despite the creation and growth of digital approaches.

This week, I aired my latest podcast about the importance of 'Brand Marketing vs. Direct Response Marketing'. Many entrepreneurs, new and even seasoned ones, dismiss branding as nothing more than a “traditional” marketing strategy that has run its course when compared to metrics-driven digital. They highly favour direct response, or demand generation, marketing – or even direct selling in an attempt to generate quick cash flow. So in this article, I’ll discuss and dig quite deep into the importance of branding in your business. Let’s get started! 

Why Branding (Still) Matters

If there’s one lesson you should never forget from this article, it’s this: your brand is your unique identity, and your deep connection with your customers. Have you ever wondered why companies such as Coca-Cola and Levi’s exist today despite being around a very long time? Especially when others such as Blockbuster have disappeared? Amongst many factors, one stands out: the consistency of their brand purpose. There are many clothing brands that have come and gone over time, but Levi’s stands tall – remaining just as relevant today as it has over many decades. And despite heavy competition in the beverage industry, Coca-Cola is still the behemoth. An incredible feat when you consider these companies started in the 1800s!

Your brand is crucial because it’s your foundation – your unique identity; your vehicle to stand out and step up! It’s how people will remember you – all the good, bad and ugly ... all the glory and the scandals! Branding is such a critical asset that it’s actually recorded as an “intangible asset” in accounting principles, and it's not uncommon for businesses that are not performing well financially to still be sold for billions of dollars - a clear example of this was the sale of Reebok to Adidas a number of years ago. Later in this article, I’ll discuss what happens when a business lacks a branding asset. But before that, especially if you’re new to the concept, let me briefly touch on the definition of branding.

What Is A Brand?

“Brand” is actually quite tough to define because there are multiple definitions, and people often have lots of misconceptions about brands. Perhaps the most common misconception is that a brand is just the business logo (and sometimes, the name itself) or the choice of colours and images. While a logo is certainly part of a brand, it’s not its sum total. Your brand, as mentioned above, is your unique identity. But what does this actually mean? It means ... everything about your business! And this is the piece that is often intimidating for new entrepreneurs.

A brand includes:

1). Mission/cause - The problem that you and your business exist to solve.

2). Business name - Ideally created to stand out and create intrigue and interest ... aligned to your mission.

3). Visual identity - Your logo, images, the colours you choose to differentiate yourself within your niche.

4). Customer experience - The manifesto you create to serve your customers, and what they actually see, feel and receive.

5). Culture - The stuff that happens when you, the leader, are not there! How your staff trust each other, take accountability, believe in and drive your vision.

The best definition of a brand that I've ever come across is - a promise of consistency. The best brand-led companies in the world stay consistent to their mission and brand values ... over time. Even if the world changes, which it is now with alarming pace, strong brands find ways to pivot, innovate and evolve, and this allows them to fight successfully against disruption. This simple point is why Levi's is still growing today (14% revenue growth in 2018 and an upcoming IPO) and Blockbuster is not (closed its doors in 2013). It's also why brands such as Virgin, Google, Amazon, Disney and Apple are thriving - they are not selling the same things that they did when they started up, but their brands have remained consistent and innovative regardless of market change.

Perhaps the key question you should ask about your brand is, “What do I want my customers to see and feel ... and is this a clear reflection of my mission?". Are you trying to create a brand about luxury? Or what about a social or environmental cause? Or what about a feeling, such as 'happiness' (i.e. Disney)? With this question in mind, branding shouldn’t be as complicated as it seems. And it starts to become exciting too! Of all the complexities around branding remember this - it all starts with you and your vision. Get this right - inspiring your purpose, aligned with solving a market problem, knowing what you stand for and against - and all the other attributes will fall into place.

Now you know what a brand is, and how to start developing a brand strategy, let’s talk about what happens when a business lacks branding or has no brand altogether.

When a Business Has No Brand

What happens when a business has no clear brand? Quite simply: it becomes a commodity. The business becomes nothing more than the product or service it offers. There are many, many coffee shops out there, but only a few stand out such as Starbucks (coincidentally where I'm writing this article!). There are many fast food joints, but only a few that stand out such as McDonalds, Wendy’s and Burger King. Even in the most commoditised categories of all a brand speaks with power. For example, gyms can be nothing more than a facility to help people get fit… but Gold’s Gym stands out, mainly because of its legendary and pioneering foundations. The objection to this idea sounds something like: “Yeah, sure. Brands can help you stand out. But all I want is to sell! Why not focus on a direct selling approach since, after all, all we want to do is generate cash and make profits, right?”.

This makes a lot of sense … until you see the flaw. Focused selling as a standalone works brilliantly short-term. However, it doesn't build equity, predictability and longer-term value. Why? Because of the fact that you don't focus on being different. In fact, you're winning only because you have an ability to sell and that is one of the easiest things to improve on as a purely tactical skillset.

A strong brand plays in two ways:

1) In any given industry, there’s a strong chance you’ll have a good level of competition (probably unless you’re in say, the spaceship industry ... like Mr. Branson and Mr. Musk!). Starbucks isn't the only coffee shop out there. There are many more coffee shops competing against one another. Most likely, these coffee shops either lack branding or don’t have any brand at all, and that’s the problem. When your business is just a commodity, you don’t really offer anything besides your commodity. And since you only offer a commodity, you can easily be beaten by a competitor that offers a better version of that commodity. Sure, you can outperform one another, but this becomes a race to the bottom … and the lucky one on top for a short while can breathe until a new promotion tips the scale. This is not a good way to run a business, and if you have a strong brand, this won’t be a problem. To hammer home the point - is Starbucks being buried as yet by its competitors? When looking at global growth and value creation, no one comes close.

2). A brand also means trust. And a lack of brand can mean a customer doesn't truly understand you. This is a hard truth, but you do observe this when buying something like toothpaste where most people prefer to go with a branded offering like Colgate vs. an unknown name. If you've established your brand well, it can offer higher levels of protection vs. your competition. Imagine, they won’t buy your competitor's stuff simply because they trust your stuff more! That’s the power of branding. The choice is often made before even walking into a retail outlet, which is why branding has traditionally been so hard to measure.

A Few Tips For Creating and Building Your Brand

So now we’ve covered a lot of topics about branding. Let me just give you a few tips as a new entrepreneur on how you can start creating and building your brand:

1). Know and craft your message well – Your brand is really just how your customers will know and connect with you, so craft a message that you want to share with them. When people connect deeper with your business, they’re more likely to buy from you and even support your business over the longer term.

2). Create your name and logo based on your brand – Consider the name and logo as well, especially the design (colour, shape etc.). Things like colour do matter, but choose them at the end when you're clear on your vision and mission. For example, if you think of the colour red, what comes to mind? Virgin, Target etc. ... why did these brands go with this colour? Because red is often associated with power and disruption.

3). Position your brand well – Take the time to create your Unique Selling Proposition (USP). Don’t be a copycat or a “me too” business. Instead, position yourself in such a way that people see that you have an advantage, often an unfair one, over your competitors. This attracts people who want that benefit, and it has to be clearly communicated.

Alright, so we’ve covered the basics of branding! To recap, branding is important because it simply puts you in a position of leadership – aside from just being well known. It’s one thing to create a brand, it’s another thing to nurture that brand. Perhaps we’ll cover this topic in a future episode of the "Scale Up Your Business" podcast!