What is Brand Value, Anyway?
Before we dive into a discussion of brand value, let’s step back and first determine what we mean by “brand.” (It’s probably not what you’ve been led to believe.)
One of the clearest definitions we’ve seen comes from marketing author Seth Godin:
Brand: “The set of expectations, memories, stories and relationships that, taken together, account for a consumer’s decision to choose one product or service over another.”
Many businesses mistakenly view their brand in terms that are far too narrow and superficial. They might think, for example, that when they update their company logo, publish a new website or change their product’s packaging, they’re introducing a new brand.
But as you can see from Godin’s description, your brand doesn’t exist on your website or in your company’s color-scheme. Your brand exists in your customers’ minds. When you think about it this way, you can see how a wide range of factors affect your brand — for better or worse — including:
- How the public perceives your product or company
- The story your products enable customers to tell themselves
- The promise your product makes, and whether or not your customers believe it
- How trustworthy (or untrustworthy) the public believes your company to be
- How people perceive what your executives say in the media
- How a customer feels she’s treated by an employee in your store (or on the phone)
- The way your company handles negative customer feedback or bad media reviews
- Your prices (and how they relate to those of your competitors)
- Your trademarks or copyrighted materials
- How you package or present your products or services
- The way doing business with your resellers makes your customers feel
When you understand that your brand boils down to emotions your products evoke for your customers, and that those emotions often influence whether or not they’ll to buy from you, you can see why brand value is so important. Again, we’ll let Seth Godin define the term:
Brand Value: “A brand’s value is merely the sum total of how much extra people will pay, or how often they choose, the expectations, memories, stories and relationships of one brand over the alternatives.”
In other words, if your company consistently creates positive experiences for customers in all of those scenarios described above — if you provide great in-store or over-the-phone service, if your products make your customers feel better about themselves, etc. — you can create a strong brand value asset. And that asset can account directly for a significant amount of your company’s customer loyalty, customer lifetime value, market share, and revenue.
3 ways to establish brand value
We’ll discuss many of the paths to growing your brand value in more detail later in this book, but for now let’s look at a few examples.
1. Offer something new or different.
A high-brand-value company is often one that offers products or services customers have never experienced before or can’t readily get anywhere else. A great example of this is Netflix — not today’s streaming-service Netflix, but the old, DVD-rentals-by-mail Netflix.
In those early days, the company literally created a new category: DVD movies you could select online and have shipped to you through the US Postal Service.
We’ll discuss Netflix more in the next section. What’s important to understand here is that they created an original service that truly resonated with customers — a great way to build brand value.
2. Give your customer a great story she can tell herself about engaging with your product.
Think about Whole Foods. Yes, the stores sell fresh, delicious food. Yes, they carry many health-focused items you don’t typically find in a standard supermarket.
But much of what sets Whole Foods apart from other grocery stores — and has earned the company its high brand value — is the story it lets a shopper tell herself about shopping there: I’m a health-conscious, intelligent, highly informed food consumer. I’m even willing to pay a little extra to support my healthful diet.
If you want to create brand value for your company, one path is to offer products, services or experiences that let your customers craft narratives about themselves that are self-affirming, aspirational or otherwise positive. In other words, give your customer a reason to feel good about himself for buying your products.
Also, if you consider the last part of that hypothetical Whole Foods shopper’s narrative above —
I’m willing to pay a little extra to support my healthful diet— you can see that the cause-effect relationship when it comes to brand value and premium pricing can go both ways. It’s not always the case that a business must first build a lot of brand value so it can charge more for its products; sometimes charging a premium — and the story that lets the shopper tell himself — actually boosts the company’s brand value.
In fact, maybe you’ve heard the unofficial nickname for Whole Foods, which the public uses derogatorily but many of its shoppers secretly enjoy: “Whole Paycheck.”
3. Establish public trust — even if that means highlighting your flaws or weaknesses.
One of the best examples ever of a business turning a negative into a positive — establishing trust with its customers, and significantly boosting its brand value in the process — is the Avis “We try harder” advertising campaign of the 1960s.
In those days, Avis was the second-biggest car-rental service, behind Hertz. So they decided to play up this fact in a series of ads — as a way of simultaneously showing honesty, vulnerability and a commitment to better service. The campaign began as “When you’re only number 2, you try harder. Or else.” Then it morphed into the even more memorable “We try harder.” And it netted the company millions of dollars in revenue and massive public goodwill — in other words, greater brand value.
Remember, your brand exists in your customers’ minds and hearts — it’s how they feel about your product when they see it or hear its name. Establishing trust with those customers —even making your company a bit vulnerable — is another great way to create positive emotional associations for your customers, and grow your brand value.