How Branding and Positioning Impact Company Value

Business-Planning-Expert-Series

A detailed understanding of how you are positioned in your competitive arena is critical for business leaders who want to lead their teams to success. Good branding brings you to market with clarity and confidence, building value for your enterprise.

Join Fusion Marketing Partners CEO Christopher Ryan for a 15-minute presentation and Q&A about the elements of a strong brand and why understanding your strengths, weaknesses, opportunities and threats will give you a better chance at achieving prosperity and reaching your goals.

Nate Warren

Nate Warren is the host of the Business Planning Expert series and a marketing/advertising/PR writer and editor with more than 25 years of experience across newspapers, startups and agencies. Nate interfaces with internal and client strategists to crystallize B2B or B2C messaging for any medium.

Nate WarrenExpert Series Host
Christopher Ryan

Christopher Ryan is president of Fusion Marketing Partners. Chris has twenty-five years of marketing, technology, and senior management experience, and is a widely known expert in business-to-business marketing, sales strategy, systems, and processes.

Christopher RyanPresident - Fusion Marketing Partners

Listen To Audio:

[sc_embed_player_template1 fileurl=”http://centerforbusinessmodeling.com/wp-content/uploads/2015/01/E1-010614-v2.mp3″]

(To download this expert series, right click this link and Save As)

View SlideShare & Transcript

Nate:  Hello and welcome to the Expert Series in Business Planning, presented by the Center for Business Modelling (CBM). CBM’s mission is to help business leaders and entrepreneurs plot a simplified path to success with a full array of streamlined financial, operations, sales and marketing planning tools.

I’m your host, Nate Warren. It wouldn’t make a lot of sense for us to make the claim that we’ve simplified business planners’ lives and expect you to sit through an hour-long podcast, so we’re going to get in and out in about 12-15 minutes today during our chat with today’s guest, Chris Ryan. Chris is a nationally known B2B sales and marketing practitioner, writer and speaker. He’s run multi million-dollar efforts for both Silicon Valley giants, as well as plotted of the growth for successful B2B technology startups, right here in Colorado. Good morning, Chris.

Chris:  Good morning, Nate.

Nate:  So you gonna talk to us today, a little bit about branding and positioning. And why is it such a huge building block of successful business planning. So you’re gonna talk to us a bit about, how basically the process impacts the company’s value.

Chris:  Exactly.

Nate:  A strong brand, right?

Chris:  Exactly. Yeah so let’s start off. Let’s talk about this. So first of all, a strong brand. You talk about a brand, and it’s sort of an abstract concept. Actually, a strong brand for a company could be a boon to the stock price, make it more valuable. It can be a sales and profit accelerator, help you sell, and help you sell more profitably.  It can be a tool to attract top talent to your company. Lots of people wanna go to work for companies like Google that have outstanding brands. It could be a magnet that allows the drive, merger or acquisition activity. The acquiring company always wants to know that they’re buying a strong brand and it certainly will make you a more valuable acquisition target.  And finally, it can be a company morale booster. You will get people excited about coming to work for you. I like this quote from Professor at the Warton School. He says, “A valuable brand delivers return for the company on two dimensions. Either it allows the company to charge a premium price, or it adds more volume or market share.” And certainly those are strong economic impacts.

So, some of the specific attributes to a brand that drive company value: First of all, the brand should be known by the target audience. The better known it is, assuming that you’re known in a positive way…

Number two, it can differentiate you from all other competitors. And we’re gonna talk a bit about that, and how that is so important economically. Three, it offers a clear and compelling benefit. So people have a sense that when they do business with you, they get some personal benefit out of it. It should be a respected brand.  And finally, to be a timeless brand, not something that’s only of short-term duration. We joke about brand like the Chia Pet or something like that, fad type of brands that may have very short-term economic value. But a couple years later, nobody knows or cares anymore.

So let’s talk about it. We talked about the importance of differentiation a little bit ago. And we talked about differentiated brands versus commodity brands. And, basically, a commodity brand is something where the main difference between brand A and brand B is the price that the purchaser pays for it. So the differentiated brand, the kind that we’re talking about, that has solid economic value. You get a short sales cycle. You get less, if any competition at all, hopefully no competition. You’re able to drive premium price points. Sell your price, or your product, or service for a higher price than the competition, at a higher margin. And the brand itself has lots of inherent value in it, versus little or no inherent value in the commodity type brand.

Can I have the next slide please? Let’s talk about some of the world’s most valuable brands. Forbes magazine actually did a study where they calculated the economic value, the actual brand value of some of these companies. As you can see, Apple leads the list, and their brand is worth $124 billion.  Going down the list, Microsoft, Google, Coca-Cola, IBM, McDonalds, GE, Samsung, Toyota, and finally Louis Vuitton had a value of almost $30 billion dollars. That’s pretty exciting news.

Now let’s look at the other side of the coin, at the next slide: Brands that have declined in value over the years. So you’re gonna see sort of a negative economic impact of the poorly performing brand. Brands like Sears, Blackberry, (which used to be Research in Motion), H&R Block, Yahoo, and JC Penny certainly aren’t going to make the top 10 list for a brand value. And these brands definitely have some rehabilitation to do, to get back into having a strong, positive perception, and strong economic value. So the essence of brand awareness: I love this quote, it’s from our friend Jerry Garcia. He says, “Success isn’t about being perceived as the best at what you do. It’s about being perceived as the only one who does what you do.” If you look at those brands we talked about, in the top 10 earlier on…those would be perceived in a category unique to themselves, and that’s why they’re worth so much. Next slide, please.

And here I am.

Nate:  Yeah, and here you are. Chris, that was actually really good. I wanna ask you a couple of questions if I could.

Chris:  Absolutely.

Nate:  Obviously you sit down with business marketing and C-level leaders, from SMBs to global international companies, on a regular basis. When you’re sitting down with them, what are some of the tell tale signs that you see that their branding and positioning is mushy and need some help?

Chris:  Great question. First sign, and the one that we would call this, the big red flag, is if I go and talk to half a dozen executives in a company and they each give me a different description of what their brand is or what their brand promise is. It automatically tells me that there’s something wrong. Because they can’t even decide amongst themselves, how is the market place gonna know? So that would be a big warning sign. Then, secondly, if  they don’t have a strong, positive, view of the brand themselves. How are they gonna communicate that to the marketplace?  There may not be any excitement about the brand. Internally they may perceive it as stale. So these are some of the warning signs that your brand need some rehabilitation.

Nate:  And some of the people that are listening might be like, “How do I get there?” I thought maybe you’d want to talk for a minute about what a SWOT tool is, and how it’s instrumental to defining your value.

Chris: A SWOT is a tool, and I know that the Center for Business Modelling has an excellent SWOT tool that’s available, and SWOT stands for Strengths, Weaknesses, Opportunities and Threats, so, often we’ll take an executive team through this exercise. What we’re trying to do is, we’re trying to get this attribute called congruence.  And that is the actual strengths of a company: their strengths, their opportunities, match what they’re saying about their brand. A lot of time, you’ll see people pointing things about a product, like “We have the highest quality product.” “We have the best service,” or what have you. They claim leadership in a category that they just don’t have.  We call that the incongruent brand, because marketplace always calls you to task for that, when you try to misrepresent your brand. So what we wanna do is align the strengths and opportunities of the company. And also make sure that we negated their threats and their weaknesses. So that they come through with a brand that is spot on to what they can actually do out there in the marketplace. So that’s how we use the SWOT to help define a brand that has better economic value.

Nate:  So in terms of connecting insights to action: We walked through the good SWOT process. What are some of the, once we have this clarified understanding of a brand, really what separates us in our arena. What should me and my team be prepared to do once we’re satisfied that we’ve done a good plan?

Chris:  Well, let’s talk about it from the branding perspective. You’ve created a brand promise, value proposition for your company. We often do an exercise; we call it creating a messaging platform for a company. And this kind a becomes the template for everything you say going forward about the company. Always in alignment with those key strategic messages, which again, start with your brand promise.

And you carry that copy all the way through, with everything that you say. Creating a brand is not all that difficult. But what you need from that point on is consistency. You’re always presented in the same way over and over and over again. And don’t violate the principles that you established when you came up with your brand. So that’s really what we ask clients to do, is to carry that brand promise in every single thing. Not only in what they say on the website or on their product materials, but how they act when they’re with customers, and so forth. We call that living the brand.

Nate:  Yeah, I think one of the ways that companies miss the boat on this, is that they treat the SWOT process as sort of a homework exercise, to be done and filed away, when in fact what it is is a guide post to what you check…whether you’re on the web or at an event, giving an elevator pitch, you should be able to look at that guidepost, right, and say, “Is what I’m saying lined up with who we said we were?”

Chris:  Exactly. That’s a good point. And that’s why it’s always useful to go back and do your SWOT analysis on a regular basis. We recommend quarterly or at least twice a year so that you can make sure that you’re living, again, your company’s being run on the principles that you established in your brand promise.

Nate:  I’m actually glad you touched on that.  I’d love it if you could talk for a minute about, sort of doing SWOT as a launch from a blank slate or, as you said, a sort of checkup or reboot of the company.

Chris:  Yeah, I mean it’s really both. You want to do that, and if you’re doing your SWOT right, you can see that the items on your strengths are gonna change over time. Your weaknesses, opportunities and threats are going to change over time. And that’s not a bad thing. Hopefully they’re changing in a way that you desire. It’s not just figuring out where you are today, but it’s like, “Where do I wanna be in six months?” And then going back and doing a review and saying, “Are we fulfilling the mandate that we set six months ago for change in our companies?”  That we could live our brand out, as we talked about before.

Nate:  Absolutely. And that actually sets up the last question I have for you, and that is outcomes. In terms of, I’m sure you have some experiences where you’ve seen how good branding or positioning and a really strong, differentiated brand, actually helps a team on the ground. Can you give us an illustration of that?

Chris:  Well, I’ll give you one illustration from my career. Earlier on in my career, I was Director of Marketing for a startup company called Group One software. And we had a choice when it came to branding. And one of the advantages of, when you’re just starting out as a new company, is you have a clean slate. And you can brand and so forth, but then again like we said before, you have to live the brand out. And so we could have taken a very narrow focus. Something like “postal discount software” or “merge/purge software” or something like that. Instead we set up brands back then. We tagged the company the Direct Marketing Software Company. That brand lasted for two decades, and the company was sold a few years ago to Pitney Bowes for almost half a billion dollars.  So you can see from a pure startup, with no assets to speak of, how that brand itself— now, I’m not saying that’s the only thing, there were a lot of great management team, good products and all that—but I think with a much weaker brand or undifferentiated brand, the company would not have been successful. So I think that’s a good example,of the whole premise of this talk today, is that your brand could potentially have a big economic value.

Nate:  It certainly does. And, Chris, that’s certainly good stuff. I know you’ve got a lot on your plate. Thank you humbly for making some time for us today.

Chris:  Happy to help.

Nate:  And for those listening in, and watching, once again that was our guest for the day, Chris Ryan. Chris is, of course, president of Fusion Marketing Partners, and he bogs voluminously at greatb2bmarketing.com. You can connect with him via his company or get some of his shared wisdom at his blog. Also if you want to reach out personally, he’s available on LinkedIn and Twitter if you want access him there.

Once again, this is it for this instalment of the Expert Series in Business Planning. As always, we’re here to help you take the brain damage out of business planning. So you should head on over to centerforbusinessmodeling.com and avail yourself of the many free resources we have on the site right now. Also, if you have a business planning topic you’d like to see on an upcoming podcast. Please reach out to info@centerforbusinessmodeling.com. We’d be happy to field your questions and get an expert to maybe throw some light on some of the questions that keep you up at night. Until the next time, thanks for listening and keep planning to win.