Align With Shareholders

Like beauty is in the eye of the beholder, branding success is in the eye of the shareholder. Results of any attempts to build or strengthen brand equity, lie in the laps of shareholders.

Exploring shareholder values and goals is a critical early step in the branding process, and an art that requires special handling. Without defined boundaries, those attempting to brand, or re-brand, may work themselves out of favor- off the canvas. The goal at this step is to clearly outline the canvas of a masterpiece not yet painted.

Coaching an organization through a branding, or re-branding, process requires knowledge of some key factors: industry norms, organization size, management style, cultural norms, etc. Organization size, for example, can greatly influence the method used, but the objective is still the same: to establish the boundaries of the artwork.

With a well defined canvas, entrepreneurial spirits can be stimulated to identify and characterize market opportunities on the horizon. Before setting out to identify opportunities, it is a good idea to determine the basic motives of shareholders. Shareholders with a lower risk tolerance tend to seek opportunities in existing paradigms; whereas, organizations with higher risk tolerance tend to seek opportunities where no man has gone before.

Organizations with low risk tolerance rely on information gained from within the current paradigm. They attempt to predict future opportunities by analyzing existing information: trends, market forecasts, competitive landscape, organizational accomplishments and strengths, current and pending regulations, recent industry announcements, etc. Consistent with their low risk tolerance, they tend to establish conservative values. Understanding your shareholders goals, risk tolerance, and values becomes a critical success factor.

Organizations with a thirst for new frontiers, tend to tolerate more risk with anticipation of higher gain. These organizations invest heavily in research and development. They fund processes that generate high volumes of provocative ideas; they evaluate ideas and develop new concepts. They tend to share ideas, putting more energy into paint new paradigms than protecting old ones. Still, key goal of these organizations is to create and secure intellectual rights to entirely new concepts that lead to new markets. A market leader in this category moves swiftly to become the dominant player- to become the 900 pound gorilla.  Branding this kind of organization requires a completely different strategy, one that requires different tools, skills, and processes.

Clearly, before setting out to develop a new brand identity, it is important to understand the motives of the shareholder.  Knowledge of shareholder motives, and their boundaries, will help identify elements of a new brand, like paint on pallet. With a pallet of paint, the artist can begin to develop a strong brand identity aligned with shareholders.

Brand Stability as a Strategy

Technology and globalization impact brand stability more today than ever before, and the number of competitors is greater than ever.  Technology enables new brands to emerge and existing brands to evolve quickly. With increased competition and fast access to larger markets, brand management is a growing challenge. Brand managers have to be especially savvy and innovative in order to build brand value.  Building brand value requires clarifying identity, increasing bond strength, and winning favor.

Brand identity is the market's perception of all elements of the brand. The identity can be strong, weak, or anywhere in-between.  Some buyers will purchase with no awareness of brand identity; others choose strictly out of brand loyalty.

Brand strength is a measure of adhesion between elements of the brand. When a product, or product class, becomes synonymous with a brand identity, the association between the brand's strength is maximized. Brand strength, however, does not indicate the level of favor towards a brand.

Brand favor is a quality indicator of the consumers experience with the brand: the quantity and quality of all touch points between consumers and all elements of the brand.

Brand value is the product of the three factors:  brand identity, brand strength, and brand favor. Understanding a brand's current situation helps leaders craft a strategy for steering the enterprise towards value growth.

Winning requires knowledge of the enterprise's current situation in the marketplace.  This knowledge provides insight to the brand's market potential.  Below are three hypothetical situations with extremes of the three factors, to illustrate a point.  Notice that each situation calls for a different strategy.

• Situation A:  Low brand identity, High brand strength, High brand favor
• Strategy:  Promote the brand, Re-evaluate elements, etc.
• Situation B:  High brand identity, Low brand strength, High brand favor
• Strategy:  Improve total customer experience
• Situation C:  High brand identity, High brand strength, Low brand favor
• Strategy:  Transform the brand

Variation among the three factors is at least, in part, a function of the brand's level of specialization in the market, something that is irrelevant if comparing brands within the same market; however, if comparing brands across differing markets, the challenge becomes more complex. When managing multiple brands, each brand needs to be normalized based on it's degree of specialization in the marketplace. This calls for a dissertation, perhaps with entrepreneurial opportunity.  Any takers?

Major shifts in these factors can produce rapid gains or losses for shareholders. If not managed, these factors expose the brand to undue risk: risk of unexpected losses and risk of missed opportunity: an environment that allows competing brands to leap frog and new brands to emerge. Managing the range and variation among the three factors is key to reducing exposure and creating brand value.

When the three factors are managed, brand performance becomes more predictable. A brand's ability to more accurately forecast performance improves its ability to plan and execute. When a brand demonstrates improved ability to forecast, plan, and deliver-to-plan, shareholder confidence grows. Still, high shareholder confidence should not be confused with high brand value. After all, brand managers can reliably cannibalize one brand in order to strengthening another.

Profitability is strongly correlated to a brand's level of specialization.  Specialty brands tend to have higher margins, with increased volatility and higher risk.  Brands in the specialty market rely heavily on innovation. Transforming brand offerings helps the brand keep pace with changing market conditions.

Brands that reside in the commodity market are more stable, and have lower margins with less risk.

Big opportunities are created when leaders stabilize brands within the specialty market. A strategy of innovation is used to strengthen their degree of specialization as they manage the variation in the three factors (brand identity, brand strength, brand favor). Stability of these three factors breeds shareholder confidence; when this occurs in specialty brands, you get high confidence and high margins- a combination that fuels growth and maximizes brand value.

Importance of Deliberate Brand Management

Corporate enterprises, including public figures, invest significantly in brand recognition and strength.  Understanding your market is a basic premise of effective brand management for corporations.  Companies invest heavily to connect brand image, sound, smell, geometry, texture, and emotion with life experiences that humans appreciate.  They also develop policies and procedures to protect themselves against exposure to experiences that people dislike.  The value of a company is largely determined by the value of its brand.

Target What Gives You the Most Bang for the Buck

For individuals, our character is our brand, our personal brand.  As individuals, we have target markets too.  For example, as young singles, we seek attention from prospective mates.  Our target market includes those people who exhibit or appreciate behaviors and artifacts that we enjoy.  Our market also includes members of society that can influence our ability to earn an income.

As we live life, our goals and plans change, and our target market shifts.  Not only do our desires change, but so do the desires of each member of our target market.  This means that our brand strength shifts over time, even if we do nothing to deliberately manage our brand.

In America, individuals have the freedom to shape their personal brand.  Keep in mind that your personal brand is being measured every day by other members of society, including those in your target market.  Like it or not, social accountability exists, and by looking and planning ahead, you can influence the value of your personal brand, whatever it may be.

If you like it when people tell you how much they admire your character, then "doing the right thing" is probably the right thing to do.  If you appreciate when people admire your artwork, then presenting your art in a way that pleases others is one way to increase your brand strength.  If you want to be considered for that next big job within your company, then complying with company policies, working well with others, and exceeding job goals are qualifiers for moving up.

Members of our target market are constantly weighing our brand strength.  They see us, hear us, hear about us, read about us, etc. and make judgements about our brand.  Corporate recruiters are often in our target market; they often explore social networks to see if our personal brand aligns with their corporate brand.

Some people simply choose to not care, but the fact is, we don't know what is to come.  We can not go back in time.  What we said and did yesterday, is here to stay.  Thankfully, we can off-set what we said and did yesterday with what we say and do in the days ahead.  The bottom line is that we are socially accountable, like it or not.

As technology continues to evolve, more and more of our character will be imprinted on the world, widening the divide between those who care and those who do not.  Your posts, photos, friends, etc. impact your personal brand.

Before you explore new territory, consider not only what is important to you today, but what may be important to you in the future.