In the article that Mike wrote, we talked about the three objections to branding. His article shows us that not everyone is at the exact place to brand, and not every company needs a lot of branding. It can be a waste of money in some cases. Let’s talk about when it is and when it isn’t a waste of money.
Let’s talk about the principles, and then do an exercise to figure out exactly how much you should spend on branding.
In one industry, companies might spend between 5-10% of annual revenue on branding. But markets and industries differ.
So if you are in a big company that is public, you may not have the power to brand. You may be outranked by a board of directors who wants to say the right things but ultimately do the things the way they’ve always been done. If this is the case, your branding should not overpromise. Instead, do enough branding to make the promises that you can keep, then realize that it may still feel to a lot of people like you’re a commodity and something they can get somewhere else the same.
Do You Have the Power?
Corporations might have stakeholders that limit their ability to lead in any specific direction. That’s why many midsize companies have an advantage. They might find it much easier, because you can maintain ownership and control the company and make it something specific and valuable that a lot of people will really appreciate.
This is the sweet spot. It’s where you’re big enough to matter in the world, but small enough to be independent. You are able to matter in a very particular and specific way. You don’t need to follow pop culture, and you don’t have to answer to a board of directors. You can create authenticity and a place where not everyone might want to work or do business, but the right people will absolutely love what you’ve created.
Are you Covering Something up?
If you’re covering something up, it’s like piling money in a dumpster and burning it. Actually, it would be less wasteful and frustrating, since the cost goes beyond the money you’d spend on branding, since it has wider-reaching effects on people’s jobs and reputations.
In other words, don’t try to talk your way out of a bad product or bad behavior. Instead, “change” your way out of it.
Are you willing to take the steps to change? Then you might be a candidate for branding after you’ve made the necessary personnel and process changes. PR can also help in that kind of situation. But actions and long-term commitments have to come first. A rebrand, without meaningful action, is not going to help you for very long. And if it did, our conscience wouldn’t let us recommend it.
Are You a Commodity?
How commoditized is your business? Look at how much other companies of a similar size in your industry are spending on branding. Does their stuff look really nice? Are they sending out really interesting messages? Do they sound like they know who they are and what they’re about? Then this may be something you want to think about.
But if people choose you because of price, speed or some other basic metric, there’s probably not a big reason to tell people about something else.
Still, you could create for yourself a competitive advantage that’s pretty big if you’re able to understand a dissatisfaction people are having with that industry that matches one of your strengths. Remember that before Nike, running shoes were pretty commoditized. There wasn’t nearly the brand loyalty there is today.
How Much Brand Debt Do You Carry?
How far behind do you think you are? How much opportunity is there to build? Is your brand there or does your brand leave a lot to be desired? If your brand lags behind others, and you’re still in business, this could be a matter of discovering your value to people and then being really explicit about it.
So, let’s analyze.
- Do you have the authority? How much power do you have to influence your company culture and define what you’re about? Rank on a 1-5 scale, 5 being the most authority. If your answer is a 2 or less, stop here. If it’s 3 or more, move on to the next question.
- Do you carry brand debt? How far behind do you think you are? Is everyone more developed than you in your industry? If you’re pretty far behind, give yourself a bigger number, like a 5. It means you might have a ton of potential to rebrand. If your score is 3 or more, move on to the next question.
- Disqualifying questions:
- Are you covering something up? If so, don’t rebrand until you’ve cleaned up some things internally.
- Are you a commodity? If so, you shouldn’t rebrand, unless you think your industry could be changed if you did.
The next task is to find a company you trust and talk with them about what you should do to brand your company. Make sure that they have a brand that you trust, and once you’ve defined your brand to the right extent with things like values, style guide and logo, then go talk to those marketing folks who hate branding, and get their help with SEO, direct-response or whatever works for your industry.
Get your brand and marketing strategy set, and build the company that means something to your employees and to the market because you’re doing the right thing and running a company that knows what it’s about and that you can be proud of.
If you’re looking for more practical tips like these, consider signing up for our newsletter, registering for our next webinar, or subscribing to our book launch mailing list which will have tons of exclusive insights from our upcoming book.