INTRODUCTION:
What is Brand Protection?
Brand protection refers to all of the systems, actions and policies a company creates to safeguard the value of its brand — which, as many businesses do not realize, is often one of a company’s most valuable assets.
Brand protection could include monitoring all public references to your company or products — from media mentions to customer reviews online — and taking any appropriate and available actions to prevent or counteract negative public perceptions from taking hold. Brand protection can, and should, also include implementing a reseller pricing policy — such as a Minimum Advertised Price (MAP) policy or Minimum Resale Price (MRP) policy — to protect against reseller price wars and the potential degradation of your brand’s perceived quality in the market.
Why Brand Protection is Mission-Critical
Your brand has value — tangible, monetary value. And, no, “brand” in this context isn’t just a fashionable way of describing your company or your products. Your brand is a real, standalone asset — like a factory or a company patent — and it should be respected and valued accordingly.
So what, exactly, is your company’s brand? One of the clearest definitions we’ve seen comes from marketing author Seth Godin:
Brand:
“The set of expectations, memories, stories and relationships that, taken together, account for a consumer’s decision to choose one product or service over another.”
Many businesses mistakenly view their brand in terms that are far too narrow and superficial. They might think, for example, that when they update their company logo, publish a new website or change their product’s packaging, they’re introducing a new brand.
But as you can see from Godin’s description, your brand doesn’t exist on your website or in your company’s color-scheme. Your brand exists in your customers’ minds. When you think about it this way, you can see how a wide range of factors affect your brand — for better or worse — including:
– How the public perceives your product or company
– The story your products enable customers to tell themselves
– The promise your product makes, and whether or not your customers believe it
– How trustworthy (or untrustworthy) the public believes your company to be
– How people perceive what your executives say in the media
– How a customer feels she’s treated by an employee in your store (or on the phone)
– The way your company handles negative customer feedback or bad media reviews
– Your prices (and how they relate to those of your competitors)
– Your trademarks or copyrighted materials
– How you package or present your products or services
– The way doing business with your resellers makes your customers feel
How Brand Value Can Add Value to Your Company
Okay, now you know what brand is: It’s how customers and the general public feel about your products or your company.
Which means also you know the counterintuitive and little-known truth of where your brand is: It exists in the minds and hearts of the people who engage with your products and your company (and not, as many businesses believe, in your color-scheme or on your website).
And you now also know what brand value is: It’s the real, quantifiable asset you’ve built based both on the sum total of consumers’ feelings about your products, and on the likelihood those feelings will lead them to buy from you.
So now is a good time to stop and ask: Why is brand value so important in the first place?
There are several strategic business reasons that any company should be able to measure, grow and protect its brand value. We’ll describe a few of these reasons below, and then we’ll discuss a few real-world examples of what brand value can do for a business.
- Brand value adds to a business’s overall value. When a business is setting itself up for what investment bankers and venture capitalists call a “liquidity event” — for example, selling the business to a larger organization, or taking the company public in an IPO — it’s strategically valuable for that business to present itself in the strongest light possible.In such cases, the greater the company’s on-paper value, the more money it’ll attract — either in terms of a larger sale price from the acquiring company, or in a greater amount of public investment when its stock starts trading on an exchange.When a company can quantify its brand value, and add this asset to its balance sheet, it allows the company to present itself (correctly) with a greater overall value than if it had left this important asset off of its books.
- Brand value can help a business raise more money, and under more attractive terms. A key hurdle in the lives of many businesses is raising capital to fund operations. Young companies often need investment to keep them afloat until they can become self-sustaining by generating revenue selling their products. Larger and more established companies often need capital to fund expansion projects or major research-and-development initiatives.When a business goes out for funding — say, to a bank or private-equity firm — what the company already has in terms of existing assets will be a major factor influencing how much money investors are willing to offer, and at what terms they’ll offer to structure their investment.A company that already has a significant amount of assets — which would include brand value — will be in a better position to convince investors to place their capital in the company’s business. A high-brand-value company will also likely be able to secure more favorable investment terms than would a company with little or no existing brand value.
- Brand value can help create a more productive, engaged and loyal internal team. A brilliant technology professional with an outstanding pedigree — say, a proven software developer with a graduate degree from Stanford — can probably have his pick of jobs in Silicon Valley or anywhere else.But why do so many of these technology rock stars flock to Google and Apple? Why do so many apply for work at these companies, in fact, that the HR teams have to come up with increasingly complex candidate-screening processes to weed out all but the best of the best? Why don’t these in-demand developers go for gigs in equal numbers at other tech giants, like Dell or Cisco?Because Apple and Google had huge brand value — and that brand value speaks not only to consumers and the press, but to the company’s own employees and job seekers as well. As it can do for your customers, in fact, a strong brand value asset can give your staff a great story they can tell themselves. The employees at Google and Apple know that they’re working for some of the most innovative, world-changing companies ever.The pride from that feeling means that, generally speaking, Google and Apple will receive more commitment, more creative energy and more loyalty from their teams than will other companies that haven’t built such powerful and emotionally resonant brands.
- Brand value can help boost a business’s share price. Finally, brand value can contribute to a publicly traded company’s stock price — and, by extension, give the business a bigger overall market capitalization.Think of how financial analysts generate reports every year listing the most valuable brands. You’ve probably seen these fun competitions covered in the news media: One year Coca Cola has the highest dollar value of any brand in the world (tens of billions of dollars, attributable to the company’s brand alone), and the next year, it’s Apple, or Google.These analysts’ brand value reports — which are based on in-depth research into the businesses’ practices, balance sheets, surveys of customers, etc. — aren’t just for fun. Determining a business’s brand value — that special something that means the company will likely fair better than its competitors, even in tight economic times — informs financial experts’ decisions about whether to mark a company’s stock a “buy,” or a “hold.” In other words, for a public entity, brand value can translate into real value in the equities markets and to its overall market capitalization.
6 Brand Protection Best Practices
Have we convinced you yet of how important — indeed, mission-critical — it is to develop a comprehensive, companywide strategy to protect your brand? If so, you might want to begin taking some of these steps as soon as possible.
- Make brand value protection (and growth) a strategic objective for every employee. As we pointed out earlier, this works only if everyone across your business is on the same page. Your customer service teams, your sales reps, your front-office staff, your marketing department — everyone in your company needs to understand the importance of your brand value and their role in protecting it.Your tech support staff, for example, needs to know how important their role is to the overall public perception of your brand. In the era of social media, when a frustrated customer can tweet her anger at the snarky tech rep from your company — and that tweet can go viral — your brand’s value can be greatly affected (for good or bad) by anyone on your team.
- Set up an Authorized Dealer Program to limit and safeguard your resale channel. One of the risks to the brand value of any manufacturer or brand owner, if they sell through retail partners, is losing control over which companies are representing their products. If a company doesn’t maintain strong oversight over which businesses are selling its products, that business can find its brand the victim of lousy retailers offering lousy service to customers — all in the brand’s name. Unfair? Yes, but true nonetheless.This is why Apple is so careful about which retailers it lets carry its products. You should do the same, by establishing an Authorized Dealer Program that would-be resellers that want to sell your products will have to apply to — so you can thoroughly vet them before trusting them with your brand.
- Give your authorized retailers tools to prove they are part of your official resale channel — like a trust badge or other authorization icon.If you develop an Authorized Dealer Program, one critical component of the packet you give your newly minted resellers when they make it through your vetting process is some sort of trust icon that they can display with all of their sales and promotions advertising your products.This simple tool literally benefits everyone involved. For your retailer, being able to post a little “Authorized Dealer Verified” badge on their eCommerce site alongside your product helps them boost their own credibility with their customers. For the shopper, this trust icon — if you make it a clickable link that opens a new window verifying your company has endorsed this retailer’s ability to sell your products — gives them the comfort of knowing they’re dealing with an authentic product from a legitimate seller.And, perhaps most important for our discussion here, this trust icon helps both protect and grow your brand value. It can protect your brand’s value in the sense that it will help your customers learn to distinguish between your true retail partners, which are an important of your brand experience, and unauthorized retailers, which aren’t. This powerful little trust icon can even help you grow your brand’s value, because seeing the badge alongside all of your products online will, over time, add a sense of care and exclusivity to your brand.
- Develop a system for monitoring all public references to your company that might affect your brand value — customer reviews, ratings, etc. Because your brand value represents the sum total of all experiences the public has with your brand, you need to be as vigilant as you can about monitoring every piece of information out there about your brand — positive and negative — that a customer might come across.This includes product reviews, ratings, customer comments online, YouTube videos discussing your products, tweets and other social-media posts relating to your products, etc.And because it simply won’t be feasible or cost-effective to implement this process manually — constantly checking everywhere across the Internet for references to your brand — you’ll need to automate this review tracking process.Only when you have a comprehensive picture of what the public is saying about your brand can you develop an effective strategy for leveraging that information to protect or enhance your brand value.
- Draft and publish an effective reseller pricing policy.When you consider how much your resale partners can affect your brand value (in either direction), you can see why it’s so important that you establish a clear set of policies regarding how you want those resellers to represent your brand to their customers.Which means you’re going to need a written, well publicized reseller-pricing policy.Because each business is different, you’ll have to determine for yourself which type of reseller policy makes strategic sense for your company. If your company is focused primarily on protecting your brand’s public perception and reputation, you might want to set up a Minimum Advertised Price (MAP) policy, which manufacturers use to establish the lowest prices they’ll allow resellers to advertise their products. If you also want to have influence over your resellers’ actual selling prices of your products, then you might instead want to draft a more comprehensive Minimum Resale Price (MRP) policy — which covers both reseller advertising and actual sales prices.These can be tricky documents to craft, with negative business implications and even legal trouble for poorly written or sloppily enforced policies. So whichever type of policy you opt for, you’ll want to enlist the services of legal counsel, brand protection experts, or both to help you navigate these potential pitfalls.
Bottom line: If you sell your products through retail partners, those partners are taking your brand in their metaphorical hands with every sales page, ad and customer communication about your products. And because their mistakes or bad behavior — including advertising your products for less than you’re comfortable with — can undermine your brand’s value, you need to establish a clear set of guidelines upfront and demand every reseller follow them. Drafting and publishing a reseller pricing policy can translate directly to protecting your brand value.
- Monitor and enforce your pricing policy — 24/7/365.When you have a reseller policy in place, and you’ve communicated that policy to every one of your authorized resellers, your work isn’t done — it’s just started.Now it will be time to monitor the Internet to make sure your authorized resellers are adhering to your policy’s guidelines — and to catch and go after those unauthorized retailers who are somehow getting their hands on your products without your permission and underselling your legitimate retail partners.As with monitoring the Internet at all times for customer reviews and other public feedback about your brand, you won’t be cost-effectively able to police your entire resale network at all hours of every day. Which means you’ll want to set up an automated solution for online brand protection and reseller policy enforcement.The right automated brand protection system will scour the entire Internet at all times, find any violations of your policies, alert you and your team in whatever way you prefer, and take whatever additional action you choose.
But whichever solution you opt for, keep in mind that this step is not optional. As we tried to make clear throughout this book, you can’t protect or build your brand’s value unless everyone on your team — and this includes the retail partners who bring your brand to their customers — is working to preserve that brand value.
