I know that some of you believe that branding is the stinky, dirty job that cowboys do when they use a hot iron to burn their ranch’s mark on their cattle. Or maybe you think it’s what your doctor recommends you eat in order to stay “regular”. Well, that’s not what I mean. I’m talking about the branding that successful businesses use to position their companies in the marketplace.

Now, before I get into the details, let’s administer a little quiz to check your branding IQ:

Which of the following is true about branding?

A) It’s the process of designing a company logo, tagline, or slogan.
B) Only the creative, artsy-fartsy folks in the marketing and advertising departments need to worry about it.
C) It’s an intangible asset that cannot be measured.
D) Small businesses need not invest in it; branding is only used by global consumer companies such as McDonald’s and Disney.
E) None of the above.

The answer is E, none of the above. All of these statements are common misconceptions about branding. How’d you do? Competition in today’s speed-of-the-Internet world is kind of tough, in case you haven’t noticed, and the current economic conditions don’t leave much room for slackers. Achieving a unique market position that creates sustainable growth is becoming more and more difficult.

It used to be enough to focus only on product differentiation, but the present environment requires a high level of investment into research, development, and production capabilities to keep growing. Then you’ve got to pump mega-bucks into marketing those points to make it worthwhile.

In other words, the stakes are getting higher and higher. Business leaders need to understand that a comprehensive corporate branding strategy is necessary.

In recent discussions about branding with friends and colleagues, I’ve realized there are varying opinions about this subject. So I decided to consult a couple of branding gurus to be sure I understood this topic well enough to write intelligently about it. (No wisecracks about my “smarts,” now!)

What Branding Is . . . and Isn’t
Branding is not a trademark. It is not a logo or slogan, nor is it advertising,” says David Hopkins, managing director of the Carlson Brand Enterprise, an experiential gaming and consulting group that includes MBA students at the University of Minnesota’s Carlson School of Management. “Sometimes people confuse branding with logos and slogans and expect it to be a magic fix-all. But branding is more complex than that. It is the set of associations that are developed over time between a customer and a company. Ultimately, it’s a person’s feelings or emotional connections to a company’s products or services.”

Hopkins says that strong brand association can act as a key differentiator for a company’s products or services. To build this differentiating power, companies need to understand the drivers of brand equity: name awareness, brand loyalty, perceived quality, and brand associations or images.

Hopkins adds that branding benefits consumers because it simplifies their choice process. And for companies, a strong brand improves customer loyalty and allows price premiums.

Aha! That must be why standing in the toothpaste aisle overwhelms me. There are so many different brands of toothpaste, each offering tartar control, anti-microbial properties, and whitening agents—not to mention all the flavors in which they are available. (Is there really any difference between peppermint, wintermint, and spearmint?). I just end up grabbing the same brand.

Hopkins explains that over time, I’ve developed a relationship with my brand of toothpaste. In essence, branding
leads to greater loyalty, Hopkins says. He adds that the strongest brands can command around a 20 percent price premium over the weakest brand in their category because of customer loyalty.

“That’s why branding is not just a logo or slogan,” Hopkins says. “It relates to everything you do as a company that affects all touch points that customers have with your products or services.”

Lynn Casey, chair and CEO of public relations and marketing firm Padilla Speer Beardsley in Minneapolis, agrees. “Branding isn’t something that you do,” she says. “It’s the sum total of every experience that anyone who is important to an organization’s success has that relates to that company.”

Another truism about branding, she says, is that every organization has a brand—and is building that brand whether the company knows it or not. Conscious brand building will make the company stronger.

What Makes a Strong Brand?
According to Casey, a company with strong brands began by examining the proposition or promise it gives its customers, investors, employees, and community. Specifically, it looked at the organization’s mission, vision, and values. It’s necessary—however painful it might be—because the company’s leaders must understand what’s in the minds and hearts of the people who are important to their company’s success, she says.

According to Casey, brands have four components:
1) What you say
2) How you look
3) How you communicate
4) What you do

The communication component, Casey says, is about being consistent, communicating in bad times as well as the good, and using straightforward language. “In this era of greater transparency, walking the talk becomes the most essential part of the brand,” she says. “It requires a lot of discipline throughout the organization. It requires everyone in the organization to understand what the company stands for, and how they should live the brand.”

Hopkins offers the example of the JetBlue Airways debacle last year, in which passengers sat in an airplane on the tarmac at JFK airport in New York for about 10 hours due in part to bad weather. JetBlue had built a strong brand with thousands of airline passengers, but one day of poor judgment by a few people led to the worst day in the airline’s history.

Almost immediately, Jet-Blue’s then-CEO David Neeleman issued a public, heartfelt apology, and the corporation has since issued an industry-leading Passenger’s Bill of Rights. These actions have helped repair JetBlue’s brand, but it will take a long time to build it back to the strength it had previously.

So who should be concerned with branding? Based on my own experiences, what I’ve read, and what my branding guru friends say, I think it should be a high priority for all corner-office folks. Everyone takes note of the things that are important to the senior business leaders. As the saying goes, “It takes a village” to build a brand and to keep the promises that your organization makes to its customers.

And if you still think that branding is something that cowboys do, then maybe you’ll understand it at your next job!