Blog 17th October 2009 The Importance of Branding
This week I attended the Bowden Dinner of the Worshipful Company of Marketors of which I am a Liveryman. The Bowden Dinner is the last great event in the annual calendar of the Marketors. Named after our founder, Reginald Bowden, it is an opportunity to hear an address relevant to the Master’s chosen theme for the year. The current Master, Peter Goudge has had an excellent year with a fine range of activities and events placed firmly in the spirit of the company and with a pleasing if slightly old fashioned emphasis on strong values and traditions evidenced by visits to Buckingham Palace, the Houses of Parliament, Mansion House and the Long Room at Lord's Cricket Ground to name but a few.
The speaker was Rita Clifton, Chairman of Interbrand, the branding consultancy. I have known Rita for a number of years and knew she would give a forthright account but I was impressed by the strength of her observations on the failings in British Business. Only four of the world’s top brands as measured by her company are British. Contrast this with the fact that 51 are American. This dominance allows the Americans to run a more successful economy and act as the world’s policeman. Several of the top brands are quite new, led by Google and Amazon. A show of hands illustrated that almost everyone in the room had a relationship with Amazon and of course without any physical contact or telephone communication, nevertheless Amazon, under the leadership of Jeff Bezos, has developed a personal relationship with each one of us, recognising us when we return to its site and recommending titles that might fit with our previous pattern of buying.
She shared her considerable frustration with the lack of recognition by Britain’s leading executives of the importance of branding in their enterprise. Rita will go to the stake swearing that she had firm and incontrovertible evidence that the role of brands is the key to creating value in any enterprise whether it is public or private, large or small, profit making or not –for-profit, public, private or voluntary sector or whatever.
Branding is about the recruitment and retention of customers, the creation and building of value, the development of the business proposition and so much more. It is the unifying theme around which employees will gather to deliver that value. Too many enterprises say that it is their people that make the difference. It does not matter how good your people are unless those people are united around that common value proposition summarised as the Brand. Otherwise they are in danger of just doing stuff, very busy but not working in a common endeavour.
Another of Rita’s targets are those who espouse the virtues of reputation management. For Rita they are barking up the wrong tree. You own your brand and so can manage it in all its forms. You do not own your reputation; that is the outcome of all the things you do, and so is not directly managed. Rather it is the result.
Her biggest concern is with the CEOs of Britain's largest companies who still don’t get it. She had recently received a letter from a FTSE CEO of which the second sentence stated that his company did not have much need of any marketing meaning he was not in the market to change his logo! The fact that he had not realised that the issue is about the profitable creation and retention of a customer, the unifying principle of a workforce, and the central proposition of the enterprise, all this had passed him by.
I was fortunate to begin my career at Procter & Gamble where all of this is second nature. One Procter & Gamble CEO said that if all of P&G’s factories were wiped out in some fantastic natural disaster as long as the company retained its brands and its people it would be able to recreate the business. This emphasis on intangible versus tangible assets has been taken up by companies like Interbrand to explain how it is that 80% of the equity of publicly quoted companies is underpinned by intangible assets versus just 20% by tangible. Not all of these intangible assets are brands; other intellectual property like patents and so on must be included. But brand values are the biggest part of such valuations, or as old fashioned accountants would have put it, goodwill.
I spoke with Rita after the event to congratulate her on the clarity of her message. I also wanted to thank her because some years ago, when I was developing my ideas for a book on the various Ps of marketing, over dinner she had helped me come up with the more clearly defined concept of “The 20 P’s of Marketing” which you can now follow chapter by chapter, month by month on this site.
Copyright David C Pearson 2009 All rights reserved