Why You Brand and Don’t Just Advertise

Quote of the Week

“If your business is not a brand, it is a commodity.” -Donald Trump

Commodities versus Brands

A commodity is something that is easily obtainable. Examples would be coffee versus Starbucks coffee, a watch versus a Rolex watch, and toothpaste versus Crest toothpaste. A commodity is something that everyone uses but has no distinction to other similar products. According to the above quote, you should be building a brand.

What is a brand? A brand originally started when farmers would mark their cattle and livestock; they would put a permanent mark on them for identification. Now, in business the brand has been turned into a unique design. It is a sign, a symbol, a word or a combination of these employed in creating an image that identifies a product and differentiates it from its competition. That is the official definition from businessdictionary.com.

Basically, a brand is a unique image that you have created for your company. What you are trying to do with your business is create a brand or something that differentiates it from your competition. You don’t want your business or what you offer to be a commodity. You want it to be unique. You want this name and/or image to be associated with your company. The words, “credibility” “quality” or “satisfaction” are quick examples. A commodity is general and a brand is unique and specific.

Examples of Good Branding and Bad Branding

There is  an auto dealership here in central Virginia called Free Bridge Auto. I have never purchased a car there, but the tagline and brand is “Everybody rides.” What comes to mind when you hear that? No matter what your credit is or what your financial situation is, “Everybody rides.” They follow their tagline with a quick disclaimer: “Do you have a little bit of money? Do you have a job?” What they are saying is that if you have a job and a little bit of money they can put you in a car. I have probably heard that ten thousand times in the last twenty years. When I have had employees who have had suspect credit or low funds I automatically know where to send them.

On the other hand, I recently passed by a restaurant called Nude Food. I have yet to eat there. I have no idea what it means. At first I thought that it was organic food but I was later told by someone else that it had nothing to do with that. That was the only reason I could think of for naming a restaurant Nude Food.  It was a confusing name and the restaurant itself wasn’t organic or healthy. There was nothing else that reinforced that image other than their name. That is a confusing brand.  (UPDATE: That company went out of business this year)

Why Should You Brand?

It increases the value of your company. Early in his career, Warren Buffett purchased companies or made great investments in companies that were brands. Some of his holdings include Coca-Cola, Fruit of the Loom, Geico Insurance, and Dairy Queen. What he learned was that at the time people did not put a dollar value on what these companies had created in a brand. In other words, when you think of Coca-Cola, you know what it is. He felt that in evaluating these companies, they had put a dollar figure on assets and revenue, but not on the branding component. He bought brands prior to people realizing the value of brands.

A brand gives your company value. It allows advertising and marketing to have a singular focus. Once you have a brand that you are trying to promote, the advertising and the marketing follow suit. It puts you on track and creates guard rails. It doesn’t allow you to have a shotgun approach to advertising.

When it comes to advertising versus branding,  I don’t necessarily advertise but I am always building a brand. Advertising is only the vehicle. Creating a unique image for my customers and creating a quality that I want my customers to associate with my business is my goal. Here is an example: let’s say that you are in the home repair market. Maybe you are a handyman company or a home contractor. An example of a branding line for that business would be, “One call for all your home repair needs.” All your advertising would convey the vastness of your services, the simplicity of what you could get out of one phone call, and the convenience.

You can build all these spokes off of your brand, but the uniqueness and the differentiation that you are trying to create is that this one call can provide you with all that. When do you brand? You start from day one.


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