Having a brand gives you a shorthand way of putting your product or service across to the marketplace, quickly and emphatically, with a name, a logo, a look or a slogan.
Over time a brand will come to embody all the attributes, history and image of your product or service. And though the value is unlikely to appear as a separate item on your balance sheet, the accountants will base some part of the goodwill you have built up on brand values.
A strong brand image will help you establish an edge over the competition and can open doors to new opportunities. For example, other lines can be bought in, branded and sold as your own products.
A successful brand is rarely about a design, it is the more rounded general impression that surrounds an organisation and helps to shape expectations.
The 'first touch' is often a name, a symbol or a design (or any combination of the three) which identifies a product, service, person or organisation as having a unique and potentially sustainable competitive advantage. Brands aren't just for big companies - they can make smaller businesses stand out from the crowd, particularly in competitive markets.
A successful brand invariably results in superior profit and marketing performance. A brand name is therefore a valuable asset which can set a product or service apart and add significant value as a capital asset.
Over time, a strong brand can become established and serve to sell your message and benefits for you. As long as the new products and services you introduce are at least up to the standard of your existing offerings, it becomes a great deal easier to launch new branded lines. The brand is your ambassador and advocate, attracting customers and reassuring them. At the same time, it will help to bring in a flow of potential new customers.
It will probably take you years to build up a strong and widely-recognised brand, but that is no reason not to get started. The initial steps are relatively easy, assuming you have enthusiasm and funding for your new venture.
The time it takes to build a brand is the time it takes your customers to come around to accepting your brand values. These may include the belief, for example, that your product or service will give better value or be more reliable than competing ones. They may also start to believe that they will be happier with your product or service than any others and that your product or service is the most suitable for people like them.
Clearly these values are based on customers' perceptions of your company and its authority and reputation in its particular field, combined with the particular benefits provided by your product. There will usually be some underlying substance to back up the customer's high opinion, but the perception will eventually become something that is more than strictly logical.
This kind of authority and reputation will not be easily won, so building a genuine brand is bound to take a lot of time and a substantial investment of cash and other resources.
Deciding on your values or what makes you special need not cost anything. However, communicating your brand message and style will inevitably require a budget commitment. The key areas you could budget for are:
You don't need to do everything at once. As long as your employees understand and deliver what your brand promises, it stands a good chance of success. Stationery, logos, packaging and advertising can follow later if the budget is tight. But it's worth planning to bring them into line within a reasonable period of time to give your customers a visual representation of what your brand means.
A separate logo, as a distinct way of writing your company or product name, is not an essential requirement for a brand. Many well-known and profitable brands exist without logos. Often they rely on their name to create the necessary impact rather than a graphic. However, the look of a brand name demands as much care and attention as a logo. It's worth using a designer to create a properly-conceived brand name identity, rather than just picking an attractive font.
Registration is not essential. But it will help in any future dispute if your trade mark is registered with the Trade Marks Registry (part of the Patent Office). To register, your mark must be 'distinctive in relation to the goods for which registration is sought' and 'not deceptive or contrary to law or morality'. You will need to check that no-one else has already registered the same mark or something very similar.
Registration (renewable every ten years) costs £200, but you should also allow for certain other costs for search and advisory work. Prices for all these are listed on the Patent Office website. You might want to entrust this work to a trade mark agent, who may also be a patent agent. Find a suitably qualified one from the Institute of Trade Mark Attorneys (020 8686 2052) or the Chartered Institute of Patent Agents (020 7405 9450).
The only time having a brand name is counterproductive is when it has become tarnished by scandal or has come to be seen as being old-fashioned, out of touch or unreliable. In these circumstances, the brand is no longer adding value.
A brand name can be stretched to cover new products or services, but only if the same brand values are appropriate to the new additions.
Richard Branson may have pushed it to the extremes, stretching the same brand to span everything from condoms and airlines to CDs and trains. But until you have the market power that Virgin has, more modest ambitions should prevail.
The only time a financial value is put on intangible assets is when a business is either bought or sold. Traditionally, a company was valued purely on the basis of its tangible assets. The difference between the buying price and book value was generally lumped under the heading goodwill.
But the more managers have come to understand marketing, the more they have realised that a company's major asset may not be its premises or equipment, but its customer list and the quality of the relationships it has with those customers. Moreover, the brand is at the heart of reputation - attracting new customers and retaining existing ones.
Brand valuation is now a major issue, because successful brands are clearly important company assets. Investing in a brand, to improve its image or positioning, may often yield better results than investing in other ways, like buying new equipment.
This is an area too important to be left to chance or guesswork. If you need to put a figure on the value of your brand, find an accountant who is an expert in this field.