When I am teaching my MBA students about branding, one of the first topics we address is language. Listening to how an organisation and themarketers within it talk about branding can prove a fruitful way to begin working out which companies get branding, and which do not.
For example, if you encounter a company or a marketer that has four or five different terms for the concept of brand and they keep using them interchangeably, you are probably in the presence of branding morons. A marketer who talks about brand essence, brand values, brand attributes and brand personality as if these terms all mean something different may have a large marketing vocabulary but the surfeit of terms inevitably points to someone who has read a lot of textbooks but not done a lot of branding.
On the other hand, if you encounter a marketer who talks only about brand positioning (what we want the brand to be) and brand equity (the current state of the brand), it usually signifies someone who knows what they are talking about. Any manager that comfortably uses the term brand equity to describe the state of their brand is, in my experience, usually pretty well trained and usually capable of mastering the brand building challenge.
The term brand equity is a great one for three main reasons. First, it’s simple. The term literally means the current perceived value of the brand. Second, equity can exist across the organisation. You can enjoy brand equity with customers but you can equally apply the term to employees or the balance sheet or the impact on supplier costs – it’s all brand equity. And finally, and most importantly in my opinion, it can be negative as well as positive. Unlike pejorative terms like “brand essence” or “brand personality” which always infer a generally positive frame of thinking, the term brand equity reminds us that branding can be a double-edged sword.
Take Barclays, for example. The bank claims in its positioning the generic core values shared by all the crap brands that don’t take differentiation or branding seriously. Barclay’s core values include being “a great place to work”, “seeing the world through our customers’ eyes” and “respect, trust and integrity”. Blah. Blah. Blah.
Where once a brand equity was a force for growth for Barclays, it is now exacting a negative impact on the business
Despite, or possibly because of, this poor attempt at branding, the bank is now experiencing the opposite of brand building. Where once brand equity was a force for positive, advantageous growth for Barclays, it is now exacting an increasingly negative impact on the business from many different angles.
At the consumer level we know that brand equity instils trust, lowers the cost of acquiring customers and helps retain them for longer. Suddenly, on the high street and in the boardrooms of investment clients, Barclays is deemed to be dodgy by many. As a result it will be harder for the bank to recruit new customers and, crucially, to retain the ones it already has.
As a service business, Barclays also depends on brand equity to recruit and retain the best employees. The sudden downturn in its reputation will have an eviscerating effect on its employees too. Aside from losing its CEO and chairman last week, there will be a gradual drain of the best talent from Barclays as morale drops and executives ask themselves if they really want to devote their lives to a company whose integrity and reputation is being questioned. The comedian Stephen Merchant might have claimed last week that he quit as the voice of Barclays’ TV ads because of “increasing commitments in the US”. But he certainly came under pressure from fans to disassociate himself from the bank.
And then there is the impact of negative brand equity on the bank’s marketing strategy. Positive brand equity acts as a multiplier of such activity. Run one ad, and fervent advocates retweet it or promote it the old-fashioned way with positive word of mouth. But here again the repercussions of negative brand equity can be prohibitive. Barclays has recently pulled its latest advertising campaigns with the aim of “returning to a business-as-usual approach soon”. No shit.
Right now almost every existing piece of Barclays’ promotional material is being vilified by the British public. The most amusing and destructive example must surely be the YouTube parody of Barclays advertising by comedian Michael Spicer, in which he adds his own “alternative” voiceover and which concludes with the slogan: ‘Barclays. Fucking Barclays’. Adland might be out of touch with the current anti-financial sentiment of the British public, but YouTube provides the barometer as usual.
Remember that what goes up can also come down. Build brand equity and you can reap the benefits across customers, suppliers and employees. But break your brand and create negative brand equity and those advantages become liabilities. The bigger the brand, the faster and further it can fall – and the greater the impact when it hits the floor.