During the heyday of the first Internet (web 1.0), every start-up raced around looking to spend lots of their VC's money on a new brand. Everyone wanted to go out of the gate with a world-class, category-defining brand. In reality, these brand efforts were really just an ante to sit at the table and play the IPO game.
In many cases failure came quickly, not because of the effectiveness of the brand (often despite it), but because the business models were seriously flawed, or the customers didn't find sufficient value, or both.
Today, both start-ups and existing businesses still declare that brand is crucial to their success. And they will point to examples of companies that have great brands and are successful - Nike, Apple, Google (the usual suspects). But what role does brand play in business success and is it really needed?
What is brand? With Google and a little effort you can find PhDs discussing the role of brand as it relates to real business value. You will find different models and approaches to establishing what percentage of market cap is due to brand. You can even see rankings of all the major brands, with different approaches to establishing the rankings, and interesting trends as brands rise and fall through the years.
Instead, let's look at a more basic model of brand. It's very simple but gets progressively more complex to develop and manage.
First, brand is a name and some visual representation of that name - pretty crucial if you are going to be in business (think Yellow Cab, for instance).
Second, it's a promise of some kind of explicit or implicit value (think Tide and stronger than dirt, for example). It's what you want people to expect of your products and services.
Third, it's a big idea. It's a theme or a concept that captures your organization's vision and drive, it's an essence or attitude that resonates with your customers and differentiates you from the competition (think Apple, Think Different, for example).
But the real common denominator of what brand is all about, whether a PhD is placing a value on you brand or if you are choosing a new name and hanging your first shingle, is really quite simple.
If you are in business, you have a customer, and what that customer thinks about your business - how you conduct the relationship, what value you deliver, how fair you are - will be associated with your business's name, your most elemental brand artifact. And this opinion, can (and will) be shared easily with anyone and everyone.
That is, quite simply, the most basic, yet most important aspect of brand for business. Your brand is your reputation - what your customer thinks of you. All of the more complex aspects of brand are extremely interesting and useful in furthering how you use brand to your advantage, but appearance, promise, and big ideas are either aligned and enhancing your customer's positive experiences, or they are at odds with them and really aren't doing you much good (in fact, research points to the fact that a disparity may actually be doing harm).
So it's really not a matter of does a business need a brand. If you are in business, you have a customer, who has an opinion. You have a brand.
The bigger questions are what kind of brand experience are my customers having? How do I measure this? How do I design my business to create positive brand experience? Is my business creating positive value and experience today? Why not?
