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All Business: Business Tools

Branding is often pondered as something that is un-reachable for small businesses. Below, Darrell Hayden of Allbusiness.com answers questions about the importance of branding.

How Important Is Branding?
Branding By Darrell Hayden

I've just started my business and people are telling me I need to develop my brand, but it seems like a pretty abstract concept. Would you explain exactly what a brand is and give me an example?

A brand is a company's face to the world: It is the company's name, how that name is visually expressed through a logo and how that name and logo are extended throughout an organization's communications. A brand is also how the company is perceived by its customers -- the associations and inherent value they place on your business.

A brand is a kind of promise. It is a set of fundamental principles as understood by anyone who comes into contact with a company. A brand is an organization's "reason for being" and how that "reason" is expressed through its various communications media to its key audiences, including customers, shareholders, employees and analysts. A brand can also describe these same attributes for a company's products, services and initiatives.

Apple's brand is a great example. The Apple logo is clean, elegant, and easily implemented. Notice that the company has begun to use the apple logo monochromatically (as opposed to the rainbow stripes), signaling a new era for Apple. Think about how you've seen the brand in advertising, trade shows, packaging, product design and so on. It's distinctive and it all adds up to a particular promise. The Apple brand stands for quality of design and ease of use.

I've got the budget for promotion and advertising, but I'm not sure about investing in branding. Isn't it all the same thing?

No. Promotional messages contained in advertising are critical components to getting out the word about your company and its products and services. But advertising campaigns come and go, shifting according to the specific needs of your company over time.

Your brand is permanent. It consistently reinforces the appropriate messages to your key audiences. A brand is the core identity of your company. It is what appears on the bottom of your ad and represents the personality that goes to the heart of your positioning. Your brand is bigger than any advertising, public relations or direct mail campaign you will ever do. It is the one thing that doesn't change.

There are so many things to worry about when growing a business -- making payroll and meeting sales goals -- what's so urgent about branding?

Branding a small or emerging business is key to the early success of that business. It is the quickest way for the company to express who it is and what it does. Inaccurate branding of a new business can make it difficult for people to fundamentally understand why the business exists in the first place.

For start-up and small businesses, branding can often take a backseat to other considerations, such as funding and product development. This is unfortunate; a company's brand can be key to its success. Dollar for dollar, it is as important and vital as any other start-up activity.

Recently, a software management company, temporarily named TallyUp, invested in a branding assignment. Its flagship product, a software suite that tracks and runs bonus incentive plans, needed a clear identity and platform to appeal to its target audience -- primarily financial executives. The name TallyUp, while somewhat descriptive, didn't capture the correct level of sophistication to attract the appropriate clientele. TallyUp retained a branding consulting company who recommended the name Callidus (Latin for "expert and skillful") to effectively communicate their positioning in an instant. The new name communicates a similar concept but on a completely different level. Callidus positions the software product correctly.

I understand the importance of branding, but I'm not sure I can afford a full-blown identity overhaul. What can a small business owner do on their own to sharpen their brand? And what can a start-up do on its own to create a brand?

Typically, start-ups come to a branding consultant because they've already stayed up late over pizza and beer, brainstorming through a thousand names and concepts, still haven't "quite gotten it nailed" and are getting frustrated. Don't do this. Start off on the right foot and make the small (in relative terms) investment in having your brand and identity created by a company that specializes in start-ups. You are starting a business, and you need to spend your days (and nights) focusing on that task -- talking to financial investors, building a team, developing a product or service, getting an office established, in short, realizing your dream and your unique vision. You don't need to spend your time trying to address issues that aren't your core competency.

As a small business owner with an established local market presence, there are some things you can do to sharpen up your brand without incurring fees from a full-fledged branding company. At a minimum, your business cards, letterhead, signage and other existing corporate identity should all display a consistent usage of your company name, logo and tag line information. If this isn't the case, an overhaul is in order. Make decisions about the color of all of your business cards -- letterhead as well as the ink. It takes some discipline, but it's important to your brand to stick to those decisions for years to come.