The Power of Brand

September 5, 2024

Brand is one of those topics that marketers love to talk about, and for good reason. It’s both fascinating and essential to business success.

Now, to manage expectations, I'm not going to go through the whole history of brand. There are so many brilliant things already out there, some of which I’ll refer to it, but I want to talk to you about the practical power of brand and why brand is important for doing better business.

So what even is brand?

Jeff Bezos, who knows a thing or two about marketing, once said "your brand is what people say about you when you're not in the room".

Paul Bailey, brand strategy director at the brilliant Halo agency, says that "a brand is shaped through a series of moments which people remember and associate with one another".

Also very recently 👋 Thom Binding, a great strategist, wrote about what he terms "total brand strategy", which talks about things such as brand rituals, for example unboxing Apple products, things that reenforce and celebrate the brand.

And if you want to hear lots of different and fascinating definitions of brand, listen to Stef Hamerlinck’s Let's talk branding podcast. He has traditionally asked all of his guests for their definition of brand (though not me when he had me on as a guest, which is frustrating because I’m the kind of nerd that thinks about things like that and had a ready answer).

Broadly speaking, and when considered in commercial terms, I think of brand as being the difference between a product and a commodity.

If you were buying fizzy brown sugar water, perhaps a supermarket home brand, you would expect to pay less than you would for a known brand such as Coca-Cola or Pepsi.

That ultimately is the power of brand.

Yes, there are other things in play, but ultimately the most powerful outcome for a business is that a strong and established brand allows you to charge more money for your product. It moves you as far away from commodity as possible.

Brand is price power.

What brand also delivers is mental shortcuts, mental availability for consumers.

When people are in the market for fizzy brown water - the category being fizzy brown water, and the category entry point being thirsty for example - in reality nobody has the time or the attentional, or cares enough, to evaluate all of the fizzy brown water options on a supermarket shelf.

And so the brand that is both physically and mentally available, i.e. the one which is actually on shelf AND which springs to mind at the point of purchase, which you recognise because of its distinctive brand assets, and which you understand is going to satisfy the need that you have for fizzy brown water is the one which is going to be the chosen brand nine times out of ten.

So brand awareness creates future sales.

Without brand you simply cannot create future sales. All you can do is hope to pick up current sales from those of the 5% who are currently in market* who somehow have no preference or will for some reason pick up a brand they’ve never heard of.

* John Dawes and LinkedIn's B2B Institute have shown that at any point in time only 5% of the target market in B2B are in buying mode.

Brand awareness is absolutely essential for creating mental availability.

Only brand can create salience, for it to come to mind in your category entry points.

Through mental availability consumers know which brand is the safest option for them, which in truth is the driver behind most purchases. It's not so much about comparative features, brand love or brand loyalty, it's often simply the least worst option at hand, what is adequate.

You might hear this referred to as satisficing. It’s how people generally buy.

So the two huge gifts of brand are that you

1. make it easier for people to buy from you in future, and

2. you justify a higher selling point.

It gives you power of price and it gives you future sales. That's it.

And who wouldn’t want that?

Right. The Obvious Questions Answered.

What actually is a brand? Not the fluffy version.

In commercial terms, brand is the difference between a product and a commodity. It's the reason one tin of fizzy brown sugar water costs more than another, and people choose it even when the cheaper version is sitting right next to it. It's the accumulated set of associations, memories, and feelings a business has built in the minds of buyers over time, and the commercial value that comes from being easily recalled and positively regarded when a buying decision arrives. Brand is price power. The ability to charge more, win without discounting, and be considered before competitors the buyer knows less well.

Isn't brand just for big companies with big budgets?

No. The mechanics work at every scale, they just take longer and look different with a smaller budget. A small business that is consistently distinctive, consistently present in the right places, and consistently delivering on its promise is building brand equity even if it never runs a TV campaign. The compounding effect is the same: every positive interaction makes the next one slightly easier. The mistake small businesses make is concluding that brand is unaffordable and defaulting entirely to performance marketing. That produces a ceiling. Brand investment, even modest and consistent, is what breaks through it.

What's the relationship between brand and price?

Strong brand lets you charge more and defend that premium without constantly justifying it. The mechanism is mental availability. When a buyer knows your brand, trusts it, and has positive associations with it, price becomes a less dominant factor in the decision. They're not comparing you to alternatives on a pure value-for-money basis, they already have a preference and they're willing to pay to satisfy it. Weak brand forces you to compete primarily on price and features. Which is an exhausting, margin-destroying place to be.

How long does it take to build a brand?

Longer than most businesses want to hear. Years, not quarters. The research on this is fairly consistent: meaningful brand equity takes sustained, consistent investment over time. There are no shortcuts. The businesses that try to build brand in concentrated bursts, then cut the budget when short-term results don't materialise, are essentially starting over each time. The commercial case for patience is strong: the brands that commit to long-term brand building consistently outperform those that don't, on every measure that matters, share of market, pricing power, customer lifetime value, and resilience in downturns.

How do we know our brand investment is working?

Track the leading indicators while the lagging ones build. Branded search share, unaided awareness in your target segment, direct traffic to your website, and qualitative feedback from new customers about how they heard of you, all earlier signals that brand investment is building something. Revenue and market share follow, but they follow slowly. The mistake is stopping investment because the lagging indicators haven't moved yet. That's like planting a tree, watering it for three months, and then concluding trees don't grow.