This article first appeared in the 30/09/2011 edition of The Malaysian Reserve
Over the years, companies have invested phenomenal amounts of money in marketing and advertising activities such as sales calls, direct mail, TV, outdoor, indoor, print and other advertising, brochures, leaflets and more. Indeed, according to Nick Wreden in his book Profit brand, How to increase the profitability, accountability and sustainability of brands, over US$1.5 trillion is spent annually on marketing (including advertising) worldwide and yet according to McKinsey, a management consultancy, up to 90% of products fail to become brands.
With little or nothing to show for these significant investments, companies looked to other disciplines and soon Branding was considered the way forward and the last 10 years has seen a major change in the resources committed to Branding.
As a result of this interest, hundreds of traditional books and ebooks have been written on the topic of Branding. Thousands of newspaper and magazine column inches have been dedicated to the discipline. Workshops and seminars have been held all over the world, all promising to teach business people how to Brand. These presentations are often uploaded to slideshare and Youtube videos have appeared, all with content related to Branding.
Many companies, including I suspect, yours have explored the concept and many have actually embarked on what they thought was a branding or rebranding exercise. Indeed, only recently, Malayan Banking Bhd (Maybank) announced it had gone through a rebranding exercise and even the Prime Minister attended the press launch of the new ‘brand’.
At the press conference, Malayan Banking Bhd President and CEO Datuk Seri Abdul Wahid Omar unveiled a new logo and explained that the bank would be spending RM13 million on the implementation exercise across the Asian region and that it would take about a year.
On the face of it and with the only evidence a new logo, this does not look like a rebranding exercise. This is more like a brand identity makeover or corporate identity reengineering, nothing more.
Another financial institution recently made a similar announcement and stated that it would spend RM15 million on a rebranding exercise. Soon after I received nine emails for a product that I didn’t understand and with a tagline that offered an exclusive deal for MasterCard holders even though I am not a MasterCard user.
Other well-known companies from the transportation, media and distribution industries have recently announced rebranding exercises that have actually been little more than a new advertising campaign.
The reality is that the new Maybank logo and identity will probably not make a difference to the brand and how consumers and organizations view the brand or the profitability of the brand. Think about it, when was the last time you signed up with or changed your bank because of a competitor’s logo?
This confusion is not Datuk Seri Abdul Wahid Omar’s fault. If we have to point fingers, we should probably point them at the marketers and advertising agencies responsible for muddying the branding waters.
It is because they have confused business owners and consumers with their contradictory interpretations that there is still a lot of confusion about Branding, the concept of Branding, what constitutes a Brand, what is Branding and how to build a Brand.
But this article is not about pointing fingers it is about identifying a definition of branding that will help Malaysian SMEs and other companies use scarce funds effectively and efficiently.
So what is a good definition that Malaysian companies can use as a foundation for their branding efforts?
We created this definition in 2004 and it still rings true today:
A brand is a long term profitable bond between an offering and a customer.
This relationship is based on offering economic, experiential and emotional value to those customers.
And it is backed up by operational excellence and consistently evaluated and improved.
We have used this as a foundation to build Malaysian brands and all of them have benefited from using this to take their brand forward. But what does it mean and how can Malaysian companies like yours use it as a foundation for their branding efforts? To do this, we need to break the definition down into three parts, as per the paragraphs above.
The first paragraph relates to two key elements, profitability and retention. One of the reasons that advertising, marketing and other traditional communications campaigns are so ineffective is that too many companies spend an absolute fortune getting a customer into their shop or showroom and then after the customer buys something, they just let them walk out the door! Isn’t it incredible that firms let customers walk out the door without attempting to at least try to build some sort of bond with them?
If you don’t why should the customer come back again? Don’t kid yourself that your product (there are some exceptions) is so unique that they will ignore other products and fight off all the attempts to lure them into competitor stores even though you have absolutely no relationship with them.
Profitability is an important branding metric, much more important than reach or awareness. It is estimated that up to 15% of a firms customers are unprofitable. You need to know who are your unprofitable customers and get rid of them.
If you have a car that won’t start and you send it to the garage and the mechanic says the engine is broken so you take the car to the paint shop and paint the body, will it help to fix the engine problem? Of course it won’t. It is the same with a brand. If you are receiving numerous complaints about the quality of your products or the time it takes to be served at a branch and you ask an advertising agency to create a new logo and you put that new logo on all your company materials, it won’t solve your quality or service issues or make your brand any better.
But if you carry out research with your customers and identify what are their requirements for economic, experiential and emotional value and then match your product attributes to those requirements for value you will make sales. And if you’ve laid the foundations for retaining those customers, as mentioned earlier, then you will be on your way to building a brand.
And by developing this emotional connection with your customers in which you deliver economic, experiential and emotional value, which incidentally will be done across multiple touch points such as when they use the counter service, through your correspondence and marketing collateral, the way you handle enquiries, your packaging, in one on one meetings with your representatives and so on, there will be no interest or need for them to take their business elsewhere.
In fact you will be surprised at the effort they will put into returning to you. And provided you keep your product or service relevant and continue to interact with those customers across platforms and channels that they engage with then you will be building a brand.
Operational excellence is a key ingredient in your quest to build a brand. It doesn’t matter how much you spend on marketing, sales, advertising etc if your organization isn’t efficient and effective it will struggle to deliver value and ergo, build a brand.
Finally, it is important to continually improve to stay relevant so you must track, evaluate and improve your brand on a continuous basis.
Instead of looking at branding as a creative exercise or short term tactical communications exercise, look at it as a holistic strategic initiative that requires internal and external research, investment in retention and not just acquisition, investment in the organization and a desire to constantly improve.
Follow these rules and you are more likely to build a global Malaysian brand.