The Importance of Brands

[Louis Louna]

People often ask, ‘‘What is brand equity?’’ There are many ways to
answer this. Some say it’s everything associated with the brand that adds to
or subtracts from the value it provides to a product or service. Others emphasize
the financial value of the brand asset.

People often ask, ‘‘What is brand equity?’’ There are many ways to
answer this. Some say it’s everything associated with the brand that adds to
or subtracts from the value it provides to a product or service. Others emphasize
the financial value of the brand asset.

Still others stress the consumer
loyalty or price premium generated by brand equity. Some even talk about
the permission and flexibility a brand gives an organization to extend into
new product and service categories. While all of these are very important
parts of brand equity, I think the following story best illustrates what brand
equity is.

Imagine you are having lunch with a long-time and very good friend.
Several times throughout the lunch, she makes disparaging and sarcastic remarks
that make you feel bad. You think to yourself, ‘‘This just isn’t like her.
She must be having a bad day.’’ You meet with her again a week or two later,
and again she acts ornery and negative. You think to yourself, ‘‘Something
must be going on in her life that she’s really struggling with. Maybe she is
having difficulties with her job or her health or her marriage or her children.’’
You may even ask her if everything is all right.

She snaps back, ‘‘Of course
it is.’’
Your interaction with her continues in this vein over the next couple of
months. You continue to try to be supportive, but she’s definitely getting on
your nerves. After many meetings and much interaction, you finally decide
that she’s a changed person and someone with whom you prefer to spend
less and less time. You may get to this point after a few months, or perhaps
even after a year or more. She doesn’t change, and eventually the relationship
peters out.


Now consider for a moment that the person you first had lunch with is the
same person as before, with one exception: She is a total stranger to you.
You haven’t met her previously and she is not your dear friend. I would guess
that after enduring many caustic comments and being insulted a few times at
that lunch, your first impression wouldn’t be very positive. In fact, you’d probably
be inclined not to get together with that person again. You’d probably
walk away from that lunch thinking, ‘‘What a miserable person. I hope I don’t
run into her again.’’
In both of these scenarios it is the same person behaving the same way in
the same situation.

Yet in the first scenario, you are very quick to forgive the
behavior. In fact, you feel a lot of concern toward her. In the second scenario,
you can’t wait for the lunch to be over and you hope never to see the person
again.
In the first scenario, the person was a long-time good friend. She had a
lot of equity with you. In the second scenario, she had no equity at all. You
see, if people or brands have a lot of equity—that is, if you know, like, and
trust them —you will ‘‘cut them a lot of slack’’ even if they repeatedly fail to
meet your expectations. If a person, product, service, or organization has no
equity with you, no emotional connection, and no trust, then you are much
less inclined to forgive unmet expectations.

Brand equity creates a relationship and a strong bond that grows over
time. It is often so strong that it compensates for performance flaws, such as
an out-of-stock situation, poor customer service, a product that falls apart,
inconvenient store hours, or a higher-than-average-price. In the end, you
want to deliver good quality and good value, innovation, relevant differentiation,
convenience, and accessibility with your brand. However, we must
never forget that building brand equity is like building a close friendship. It
requires a consistent relationship over time, trust, and an emotional connection.

Credit goes to Derrick Daye, Managing Partner of The Blake Project


Derrick has spent the past 18 years helping organizations release the full potential of their brands. His experience is as deep as it is diverse encompassing the disciplines of advertising, branding, sales promotion and public relations. Most notably he has worked with the White House Press Corps, Johnson & Johnson and the National Basketball Association.