Brand and Corporate Identity for Small to Mid-Sized Businesses

Brand and Corporate Identity for Small to Mid-Sized Businesses

http://www.jpabusiness.com.au/

jpabusiness.com.au +61 2 6360 0360 2

Table of Contents

Introduction ........................................................................................................... 3

Chapter 1: What is a brand and why do businesses need one? ............................... 4 What’s in a brand? ................................................................................................................................................ 4 What is brand and corporate identity? ........................................................................................................... 5 How do I know what my brand identity should be? ..................................................................................... 6 If I can't feel and measure brand identity, why invest in it? ...................................................................... 7

Chapter 2: How to create a brand identity ............................................................. 9 What are the first steps in creating my brand? ............................................................................................ 9 10 top tips for establishing and maintaining a successful brand identity .......................................... 11

Chapter 3: Managing your brand identity in a digital world ................................... 16 As a business owner or senior manager, what should I be thinking about in terms of managing brand identity? ..................................................................................................................................................... 16 In an age of digital marketing, why is brand important? ...................................................................... 16 How do I ‘lead’ my brand message? ............................................................................................................ 17 What happens when a brand is compromised, or finds itself in a crisis? .......................................... 19

Chapter 4: How brand identity impacts business value ......................................... 21 How does strength of a brand impact business value? ............................................................................ 21 If I am conducting due diligence on a potential business purchase, how do I determine what the brand is worth? .................................................................................................................................................... 23 How do I know when I am adding to or detracting from brand value? ............................................ 24

Disclaimer: The information contained in this eBook is general in nature and should not be taken as personal, professional advice. Readers should make their own inquiries and

obtain independent advice before making any decisions or taking any action.



http://www.jpabusiness.com.au/e-book/how-to-assess-business-value-in-small--to-medium-sized-businesses

http://www.jpabusiness.com.au/buying-a-business/due-diligence


Introduction Comments by James Price JPAbusiness Pty Ltd

n this eBook JPAbusiness is pleased to introduce guest contributors Richard Amos, Managing Director of Royce Communications, and Mike

Wilkinson, Royce Communications’ Strategy Director of Brand, Digital and Content.

Royce Communications is a Melbourne-based business and communications consultancy which works with some of Australia's largest brands across corporate, consumer, government and not-for-profit sectors. I have utilised Royce Communications’ expertise for over 15 years and always found the team’s advice to be strategic, fact-based and practical.

Richard and Mike have kindly agreed to answer our questions about brand identity and how small to mid-sized business owners and managers can go about creating their own brand strategies.

They have also provided some introductory comments about brand marketing in the 21st Century:

“The proliferation of new media has created a world of opportunity and challenge for brand marketers. Today’s businesses can’t control all brand messages, so it’s never been more important to lead them.”

Richard Amos, Managing Director, Royce Communications

“In today’s digital world you are only one half of the brand narrative. It’s no longer a sermon; it’s a conversation in which you must actively participate as both a listener and a speaker.”

Mike Wilkinson, Strategy Director, Brand, Digital and Content, Royce Communications

I



http://www.royce.com.au/


Chapter 1: What is a brand and why do businesses need one? Comments by Richard Amos and Mike Wilkinson Royce Communications

What’s in a brand? We often talk about brand as a relationship, or a connection, between an organisation and its customers – it is the connection your business has with your customers’ minds.

A brand is the sum of all you say and do in relation to your products and services, plus consumers’ personal experiences with these.

A brand:

• differentiates the product in the minds of consumers; • helps clarify the decision-making process for consumers, and • is a connection, or a relationship, between the organisation and

consumer that is extremely valuable.




A good example is when you go to the supermarket and you are faced with 50,000 different items on the shelves.

You don’t pick up every item, read the ingredients and weigh up the pros and cons of each. Instead, you choose the product, or brand, with which you have a connection.

The brand helps you emotionally and then rationally connect with your decision, and speeds up the purchase process.

Another classic example of differentiation based on brand is found in the automotive industry.

In this case, there are examples of car models which use the same chassis system and features but carry a different brand’s badge and, in the marketplace, individuals become passionate adopters of one yet not the other.

What is brand and corporate identity? Discussions about brand and corporate identity usually begin (and sometimes end!) with the visual manifestation of a brand:

• the name; • the logo, and • the livery.

However, brand identity is much more than that.

As well as the visual presentation of the brand, there is the verbal or narrative part of the brand.

This is the story the brand is telling or conveying.

The essence of good marketing is to create messaging and experiences that are aligned, integrated and consistent with your brand’s story.




How do I know what my brand identity should be? Your brand identity is intimately linked to your business plan. You need to know what you want your business to achieve and also what your brand is capable of.

You can then use a thoughtful approach to developing your brand positioning and core value proposition as well as designing a brand identity that incorporates aspects including:

• name • logo • livery • images • icons • typeface • colours, and so on, which will all carry key signals about your business.

These signals need to be based on your best analysis of what will connect with your desired audience and predispose them to value your products/services.

For example, you may target an audience looking to buy the cheapest product available, in which case a brand identity with a ‘Crazy Dave says sell, sell, sell’ style will be suitable.

Alternatively, if you are targeting a high-end consumer seeking a premium product, you may work on developing a brand identity that signals refinement, exclusivity and sophistication.

The identity is really an empty vessel at the starting point and over time will become imbued with characteristics – good and bad – that reflect the market’s perception of your brand, based on their experiences with it.




If I can't feel and measure brand identity, why invest in it? You can both feel and measure these aspects.

People’s responses to brands are visceral and powerful.

How they feel when impacted by a brand will determine whether they notice it, adopt it, buy it and tell their friends about it.

Brands invoke emotion through shape, colour and movement and emotion plays a major role in people’s desires and decisions around how they spend their hard-earned cash.

Brands can impact businesses positively by:

• justifying a price premium for products and services;

• reinforcing crucial cues that are critical to consumer buying behaviour, and

• creating loyalty, leading to long-term repeat purchases and word of mouth endorsement.

The last point in that list – loyalty – is crucial.

There is a lot of effort involved in persuading a customer or client to move through the decision-making processes and ultimately choose to purchase your product.

Once they do make a purchase, you want them to come back and, more importantly, you want them to work for you as brand marketers.

Repeat purchases and word-of-mouth endorsements are the holy grails of marketing!




Internal benefits of a strong brand

Having a strong and clear brand identity also offers value in terms of the internal alignment it can bring.

This is something we often talk about with clients and which is easy to overlook when focusing on a brand’s impact on customers.

A compelling, integrated and consistent brand strategy can align all business activities and be a very strong operational tool.

Just understanding the dimensions of the brand, the values of the brand and the personality of the brand can help internal decision-making.

There are some very famous cases of this from the past and one of the best is Avis and Hertz:

From inception, Avis had trailed Hertz for market share and, by the early 1960s, had been in the red for 13 years.

In 1962 Avis’ new president appointed a creative ad agency that came up with the slogan ‘we try harder’ i.e. we will always be the challenger brand so we’ll always have to work harder for you, the customer.

Rather than just using it in advertising, ‘we try harder’ became the company manifesto, with every facet of the business overhauled over the next four years and market share rising from 11 per cent in 1962 to 35 per cent in 1966.

Avis employees ‘lived’ the brand and used it in their day-to-day decision making. They didn’t need to have 50 meetings to know ‘we try harder’ when it comes to customer service, or getting a job done, or whatever other issue they were dealing with.

When a brand is internalised in this way, it also means that if any employee sees a value or behaviour that is ‘outside the brand’, it can be quickly identified and rectified.




Chapter 2: How to create a brand identity Comments by Richard Amos and Mike Wilkinson Royce Communications

What are the first steps in creating my brand? As mentioned earlier, your brand identity is determined by your business plan, so before you get down to the nuts and bolts of adopting a brand strategy, ensure it is aligned to your business goals.

We recommend clients have a very clear strategy around their brand, the basis of which is the ‘Brand Plan’.

The 3 Ps of a Brand Plan • Purpose – Ask yourself

what is the underlying purpose of the brand? What are the brand values? What are the value propositions around that?

• Potential – This is a reality check about our ability to achieve our aims for the brand. For example, we have aspirations of being number one in our category, but that will take a lot of time and money we don’t have. Instead, let’s try to carve out a niche for ourselves and position ourselves as the alternate to the more mature market brands.

• Promise – What is the promise to the end user and how do we achieve it? How do we make the brand purpose a reality, in light of the identified potential?




The Brand Plan fits very snugly with the business strategy and other functional business plans.

It is the organising system for how we tell our story, how we present our brand, what images we choose over others and whether we decide to engage with customers face to face or via remote service delivery, or whether we interact via Facebook, LinkedIn, YouTube or any other digital channel.

Adopting the Brand Plan

The Brand Plan also becomes the organising system for how we develop, deliver and manage the brand going forward.

We’ve created the following ‘10 steps to establish and maintain a successful brand identity’ based on the 3 Ps of the Brand Plan.

For a smaller organisation that doesn’t have a lot of resources, simply talking through these headings with your management team, or methodically answering the questions they raise as a business owner or manager, CEO or MD, can be enough to provide clarity and alignment within the business.

Then, if you have the budget to invest, the more time you spend at each step, the more you will learn and know, and the more you will de-risk your brand strategy.




10 top tips for establishing and maintaining a successful brand identity

1. Be very clear on the organisation’s goals, ambitions and capabilities

The basic discussion should be:

• What do you want to be and are you really that now?

• If you aren’t that yet, how do you become that?

• If you are that, how do you get the message out to your customers?

It’s about really understanding the business’ current situation, where it wants to be and what it can achieve. The brand must be aligned with these goals and capabilities.

2. Understand the customer and what drives purchasing in your category and in the segment you are targeting

Get in and understand your customer. If you don’t have the time and money available to actually survey the audience as to what they need and want, then talk to your sales director, talk to the person who sells on the floor, talk to the mechanics who deal with the customers, but get to know what the customer needs.

If you can’t go direct to the customer then get a proxy for that, because customers should be at the centre of all of your thinking about brand.




3. Be ruthless in assessing what you really are in this context, noting the good and the bad

So, we have our aspirational view of what the brand wants to achieve, but where are our gaps and what are the issues in relation to delivering that?

4. Review the market and make sure you understand who could take the customer’s cash instead of you

Every time you’re out there with a brand message, it needs to be competitive.

It is very, very rare in today’s markets that you are the monopoly provider of anything, so your message has to cut through competitively.

That’s not just saying ‘we are better than…’ but you have to provide some value to the customer in the context of what other people are promoting to get that customer’s money.

Understand how competitors are pitching their products and services and find a spot that you can own that’s going to be profitable.

For example, if someone else is the cheapest, be the most premium. If everyone in the market is the most premium, then be the most service-oriented.

Find something that differentiates you and your brand – your point of difference.




5. Once you have found an area you want to target as a brand, create a narrative that makes sense

Your story needs to have a whole lot of aspects starting with the promise – what is the essence of your brand?

But there are also other attributes, i.e. what are the facts behind your promise that make it believable? For example, many companies will use their heritage or time in business to prove their promise that they are a stable organisation to deal with.

So, find things that not only state the claim beautifully, but which also reinforce it and rationally support it. Then wrap around that a set of personality traits and values that align with your specific customer.

Create a story (proposition, values, personality) for your brand that is different to the rest and that is compelling to, and connects with, the customer.

6. Time for a reality check

You have the story you want to take to market, so now you must go through it and ensure you will be able to deliver it on every level.

Interrogate it to understand what it would take to consistently deliver the promise of that story.

For example, if you are positioning yourself as having the highest levels of service, are your staff trained well enough? Do your stores have the right ambience? Make sure you can deliver all those little things that add up to a customer experience that is critical in their evaluation of your brand.

You must be ruthless in evaluating whether you can deliver. It’s not about making a promise, it’s about living the promise.




7. Make sure operations can support delivery of the story

• Reinforce things that support your story • Jettison those that don’t • Bring in aspects that are missing

8. It’s not just about the product

Bring the brand story to life in everything you do:

• The product/service • Price and packaging • Your people • Your stores or distribution

methods • Your communications

9. Be in it and be present

Treat your brand identity like a living, organic thing that must be sustained and nurtured.

This advice has become even more important in the digital age because people have a multiplier effect through social media and can engage with you so easily. They can collaborate with you in building huge groups of adopters, or lobby groups against you.

You need to be vigilant and be in there, monitoring your own story, seeing how people respond to it and being ready to come back in and actively respond to any issues or multiply the good things.

We very much encourage our clients to be involved in social media, to have a content plan and be active in getting their story out there.

But that comes with the responsibility of being regularly involved in monitoring the story across social media channels. Be alert and police it, quickly addressing inconsistencies.




10. Don’t try to be all things to all people – the best, most successful brands intimately understand and target a distinct audience, thus do not appeal to everyone

Have a position and stand for something – be willing to accept that having a strong brand sometimes means people won’t like your product.

The most successful brands tend to have a group that is as equally against it, as its customers are for it. Apple is probably the best example.




Chapter 3: Managing your brand identity in a digital world Comments by Richard Amos and Mike Wilkinson Royce Communications

As a business owner or senior manager, what should I be thinking about in terms of managing brand identity?

1. Understand it

2. Integrate it 3. Live it

4. Manage it

5. Be consistent

In an age of digital marketing, why is brand important? Sometimes people ask what is most important – the product or service, or the brand?

Firstly, both the brand identity and the product or service stem from the brand essence and their alignment is critical to consumer acceptance of what you offer.

Consistency and integration are key and today’s consumer has a highly developed critical sense.

Never before have markets been so ready, prepared and empowered to ‘sniff a rat’.

For example, if a brand positions itself and develops an identity based on a caring and community-minded image, it had better not become embroiled in a sweatshop controversy.




With the social media revolution, what used to be a few agitators griping about your practices can now become a connected and powerful influencer group numbering in the thousands overnight.

For this reason, having a well-structured, clear message has never been so important. You may not control your brand in today’s world, but you can still lead it.

How do I ‘lead’ my brand message? Knowing your brand, its essence and values, and maintaining a consistent approach, are essential.

In the past, a large part of the marketing plan was focused on creating a visual representation of what was offered, in the form of an advertisement, then buying the biggest audience you could afford and putting it out there for consideration.

With digital being interactive and organic, the consumer becomes part of that process, consuming, adding to and sharing your brand messages on a scale never before possible.




Engaging in the conversation, leading the story and having a powerful set of assets (content, brand icons and identity etc.) for the consumer to propagate is the cost of entry these days.

Here are some simple guidelines for interacting in the digital space:

• Package your story in a way that connects with your customers and their values.

• Watch how they engage with and interact with your marketing.

• Participate in the conversation using your brand guidelines for direction.

• Be quick to elevate and reinforce aspects that perform well and act quickly and decisively to respond to any negatives.

Capitalise on the positives

In the modern world there are now more and more opportunities for interaction with the brand.

As we know this can be a negative, but it is also an enormous positive because there are more and more opportunities to make the customer-organisation relationship even stronger.

So, when good stuff happens, make sure it is communicated.




What happens when a brand is compromised, or finds itself in a crisis? The market has always had the capacity to notice when a business acts out of line with its brand values and principles.

Now it is connected like never before, so any displeasure around this is amplified and spreads quickly.

For example, a brand which stands for integrity and valuing staff that then goes ahead and suddenly fires 500 people, may be compromised.

The Brand Plan will not necessarily help get the brand back on track in that situation – instead, you will need other interventions, including a brand recovery strategy.

Adopting a brand recovery strategy

Sometimes organisations have to make difficult and necessary decisions, such as cutting employee numbers or services, but their brand can recover as long as they have a very clear brand recovery strategy.

For example, in 2011 an industrial dispute saw Qantas lock the gates on staff and ground its worldwide fleet. The action caused great disruption to its customers and CEO Alan Joyce was widely criticised.

You would have to say that, at the time, the brand was under a lot of stress. But throughout the crisis Qantas and Alan Joyce’s message was a consistent and pragmatic one.

The brand then worked to regain trust and confidence as part of its brand recovery strategy.

Despite the challenges, stresses and crises you face, there is always the opportunity for a brand recovery.




Brand recovery tactics – honesty is the best policy

Companies use various tactics when trying to protect their brand. For example, in the case of job losses a company may go to the market and announce a small number of redundancies, when in fact the number is much larger. They hope to shepherd that through.

One of the points we would make is that brands need to be truthful. The more they sidestep and baulk, the more difficult it is to communicate a consistent message.

If they have a straight, clear, truthful proposition that is in line with their brand values – even if it’s a painful message – that’s a story they can come back to again and again.

That can be hard for organisations, not because they’re deceitful, but because organisations sometimes get caught up in a narrative which is perhaps to the favour of their lawyers, rather than their consumers.

What we would say is, within the legal constraints – and we recognise there are constraints – it’s more effective to be very clear and truthful about what is happening when there is a brand crisis, because it’s a much more consistent and easier message to convey.




Chapter 4: How brand identity impacts business value Comments by Richard Amos and Mike Wilkinson Royce Communications

How does strength of a brand impact business value? To answer, one first has to establish what brand ‘strength’ means.

A strong brand is:

• differentiated in the customers’ minds, and

• has a compelling proposition that connects with people willing to pay for that value.

So a strong brand is identifiable and has passionate followers who use the product/service and who actively promote the brand to the people they know.

If that is the definition of a strong brand, it’s simple logic to say it has real value to a business.

Study findings support ‘logic’

Interbrand, which publishes the annual Best Global Brands rankings, conducted a study in association with JP Morgan in an attempt to quantify the contribution brands make to shareholder value among some of the world’s major companies.

They concluded that, on average, brands account for more than one-third of market capitalisation and, in the case of some very well-known brands, much more:

• Coca-Cola – 51 per cent

• Disney – 68 per cent

• McDonalds – 71 per cent



http://www.jpabusiness.com.au/e-book/how-to-assess-business-value-in-small--to-medium-sized-businesses


Now, our readers will not all be operating in the same space as McDonalds or Coca-Cola, providing hamburgers or beverages, but what this shows is that brand does have a material value to add to an organisation.

It is also fair to say that the businesses highlighted in this study have invested a great deal in promoting their brands and they all have very long histories in their markets, so their brands are very well established.

These examples are obviously at the extreme end of the brand identity spectrum, but they offer an interesting insight into where you can get to if brand development becomes a focus of your organisation.

When discussing brand strategy with any business, we would strongly make the case that a brand provides direct value.




If I am conducting due diligence on a potential business purchase, how do I determine what the brand is worth? In Australia, acquired goodwill, or the value of purchased brands, can be reported on a business’ balance sheet, but the value of an ongoing business’ own brand cannot.

This is because any form of internally generated goodwill/intangible assets (for example brands, customer lists, mastheads, licences etc.) cannot be capitalised or reported on the balance sheet.

It’s simply part of the ongoing business.

As stated above, goodwill (or brand value) can be reported as part of the assets of a business when acquiring another business.

Goodwill (and therefore brand value) is defined as being the value in which the purchase price exceeds the value of net assets at the transaction date.

Goodwill is subject to regular impairment testing to ensure the value listed on the balance sheet matches market value, but is not required to be amortised over a defined period.

Here’s an example:

You are Business A.

You are acquiring Business B.

Sometime in the past – prior to your involvement – Business B acquired Business C.

If you were to look at Business B’s balance sheet, accounting standards would allow for some value to be stated for Business C’s brand, based on its goodwill value. But Business B would not be able to state a value on the balance sheet for its own brand.

So, even if Business B had spent years investing in marketing to build its brand, that investment would not be reflected on the balance sheet.



http://www.jpabusiness.com.au/buying-a-business/due-diligence


There are ways to evaluate brand value, however, and these commonly fall into two methodologies:

• Survey methodology – This methods asks the customer base what premium they’re willing to pay for that brand’s products, relative to the average market or an unbranded product. That premium, multiplied across sales, then becomes the valuation of the brand.

• Financial methodology – This may involve looking at accrued investments in the brand over a period of time, along with the competitive strengths and otherwise of the business against market and product dynamics, plus other unique attributes.

It takes a degree of expertise to execute these analyses and interpret them, but both are well-accepted practice and there are companies that specialise in brand evaluation.

An accredited business valuer or advisor can also assist you in determining the potential fair market value associated with goodwill and the brand of a business.

How do I know when I am adding to or detracting from brand value? One clear way to determine this relates to our earlier comments: never before has the market been more primed to let you know when they ‘sniff a rat’ or when you go ‘off brand’.

It is always best to be proactive rather than to have to react to any kind of blow-up, so managers need to really understand the aspects of their brands that are central and non-negotiable.

A key action is to take those aspects and communicate them to the people that drive the business across all levels and not just in a memo!




Bring the brand to life, help them to understand it, make sure they believe in it and reinforce it in everything you do, including:

• how you answer the phones, • how you invoice clients, • the ambience in your stores, and • the tone of your social media

posts.

Consistency is powerful and creates a mass of momentum that impacts the market.

Also, the more you give your teams accountability and ownership of the brand, the more you create a monitoring system, a group of people who will help you find aspects that are out of whack with the brand and bring them back into line.

If you would like to find out more about the brand marketing services offered by Royce Communications, contact [email protected].

For business advice and broking services, contact the team at JPAbusiness.



http://www.jpabusiness.com.au/contact-jpabusiness

mailto:[email protected]

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