If you’ve read any books or articles by branding gurus, they’ve likely suggested that businesses need to identify what it is that differentiates their brand—what makes it unique and valuable to current and prospective customers. That is an important first step in the branding process.

The problem, however, is that the majority of businesses struggle with the task; they aren’t able to easily identify what makes their brands valuable. They end up with generic, vague statements about “superior customer service” and “high-quality products.”

Those businesses, branding experts suggest, have a branding problem. And the solution they typically recommend is to go back to the drawing board and take another stab at identifying the brand’s differentiating quality.

That’s where the conventional wisdom is wrong. If you struggle to find answers to “the question,” and if, in fact, several unique brand attributes aren’t all bubbling to the surface vying to be the No. 1 attribute, then you don’t have a branding problem, you have a business problem.

It’s your business—not the brand—that isn’t offering anything of unique value, which leads me to the most important “law” of what I term “organic branding.”

A great brand must start with a great company that offers great products and services

Yes, I said it. A company’s products and services and the way the company delivers those services are more important than the brand and how  that brand is marketed.

Urging companies that aren’t “great” to develop a compelling brand reminds me of the old saying about putting lipstick on a pig. Such companies are commodities, and trying to brand a commodity is an uphill battle. Those businesses first have to fix what it is that they’re offering the consumer.

The branding process, in other words, must start from the inside out.

To suggest, as I have, that the product is more important than the brand is blasphemy in branding circles. Branding experts insist that customers must have an emotional connection to a brand if that brand is to be successful—e.g., that emotional connection is what drives them to pay $4 for a Starbucks coffee.

That logic is mistaken. People pay $4 for a Starbucks coffee not because they’ve made an emotional connection to the brand but because they’ve made an emotional connection to the product. Starbucks customers love Starbucks coffee. They may love the brand now, but they fell in love with the product first.

Branding experts are confusing the brand and the product, which brings up the second law of  organic branding.

Customers must have a connection to a company, its products, or its services before they can make a connection to the brand

Before there was a great brand there was a great company that provided great products or services. The branding came later. Look at just some of the great brands: Apple, Google, Disney, Honda, Wal-Mart, Starbucks. There’s a reason why people love those brands, and it has little to do with branding.

Google is the most popular search engine despite almost no efforts by the company to build its brand. The extent of Google’s overt branding efforts is the logo on its home page. Google didn’t worry about branding; it worried about creating a product that was superior to its competitors’ and provided a greater benefit to its customers.

Google put its energy into refining its algorithms to produce the most-relevant search results. Google users fell in love with Google because it helped them find the information they were looking for better than other search engines did. In short, Google users fell in love with Google’s product before they fell for the brand.

In the same way, people fell in love with Starbucks’ tasty lattes, Honda’s dependable cars, Apple’s simplicity (its design and ease of use), and Wal-Mart’s low prices.

There are exceptions to the rules, of course. Some companies that sell commodities and put huge sums of money into building brands around those commodities are successful. If you’ve got the marketing budget of a Nike, you can take that approach; otherwise, I wouldn’t recommend it.

Further support for the “product first, brand second” argument is that brand loyalty can be so fleeting. The automobile industry is an example: Its brand loyalty is at an all-time low. that’s because more companies than ever before are making high-quality cars, and buyers are flocking to quality, not brands.

Hyundai’s recent success demonstrates the tendency for customers to flock to quality over brands. In less than a decade, Hyundai went from having no status to Top 10 status. And it had nothing to do with branding. It’s because Hyundai used to make lousy cars that fell apart, and now it makes cars that win awards for quality at prices lower than its competitors’.

Branding is Still Critical

I’m not saying that branding isn’t a critical part of the marketing process—it is. A strong brand, one that is easily recognizable and communicates the differentiating value of a company, product, or service is invaluable. It puts a face on the company and enhances the consumer’s ability to recognize and connect to that company.

That identity lays the foundation for all of a company’s marketing efforts. The argument isn’t to not brand; rather, it’s to realize the limitations of a brand on its own and the importance of the true value the company offers.

So if your business has trouble answering “What differentiates your brand?” look first at what differentiates your business, products, and services. Look at all the ways that you could possibly provide your customers with greater value compared with your competitors.

Here are just a few ways to differentiate your business:

* Provide faster production and delivery service, higher-quality materials,  and 24/7 customer service

* Make house calls

* Offer lifetime warranties, money-back guarantees, and better manuals and operating instructions

* Provide features that your competitors don’t

* Offer lower prices

* Deliver your product to customers’ front doors

* Package your product in a unique way

* Follow up with your customers via phone or email

* Provide empirical evidence demonstrating your superiority

* Offer a free service in addition to your core service

Those are just a few ideas. Develop your own list, and identify the areas that provide the greatest value to your customers while being the most feasible for your company to deliver on.

You can’t ignore differentiation. Until your business, products, and services clearly demonstrate unique value to your customers, your branding efforts will have to wait. Otherwise, you’ll simply be putting lipstick on a pig.

Over the past few years, small and medium-sized businesses have become increasingly concerned with SEO at the expense of what I like to call UEO, or “User Experience Optimization.” Is your homepage falling short? Here are some tips to help boost your homepage’s UEO. Read more at Entrepreneur.com

You wouldn’t attempt to fill your own cavity, and you wouldn’t try to conduct your own home inspection before purchasing a house–you’d likely hire trained professionals to take on these tasks. Yet many small-business owners take it upon themselves to try to manage their marketing efforts. Here are five good reasons why you should leave your marketing to the professionals. Read more at Yahoo! Small Business.

What should you be considering when developing a new product?
While this article was written in 2004 and some of the references are a bit outdated we think you’ll benefit from the principles we’ve outlined regarding new product development.

Developing a successful new product is a tricky task. Some estimates suggest that as many as 90% of new products fail within the first three years.

Even McDonald’s hasn’t had a really successful new product since the Chicken McNugget was launched over 20 years ago. In that span came the McDLT, the McLean, the McPizza – McFailures all of them. And while McDonald’s new Lighter Choices menu has enjoyed some early success I doubt that it will last. The reason? McDonald’s has tried to capitalize on shifts in the market place – the popularity of pizza, healthier food choices – and as a result has shifted its focus away from its core customers. McDonald’s customers want convenience, taste, and affordability. When McDonald’s moves away from these core customer values it set itself up for failure. The McPizza ignored convenience, the McLean taste, and the Lighter Choices menu sacrifices both taste and affordability. McDonald’s succeeds when it develops from the customer out rather than from the market in.

So what can McDonald’s and other marketers do to improve their luck? Here are a few suggestions.

Every stage of product development should focus on your customers. Ask as many questions as possible. You should be able to zero in on your customers until you can actually picture them as one individual and get inside their head.

I find role-playing is a great way to get inside your customer’s head. I like to think about how, as my customer, I would interact with the product in the context of my customer’s everyday life.  Don’t just develop a product for them; develop it with them. If your budget is tight and you can’t do extensive market research, do some informal information gathering. I find friends and relatives can be an invaluable resource when they fit your customer’s profile.

Ask questions based on real-life scenarios. Don’t ask your customers what kind of car they would like, ask them what they would buy. They may tell you they want a Mercedes when all they can afford is a Hyundai.   Never fall in love with your product. It should be your customers – not you – who will determine what your product ends up as.

Pretend you don’t have any money to market your product. How well would your product appeal to your customers based solely on its own merits? Too many products, it seems, are developed using the marketing campaign as a crutch. The attitude being that as long as you promote the hell out of a product it will be successful. This approach is destined to failure.

Don’t be afraid to play follow the leader. Many product development gurus strongly advise against developing copycat products. I say there are many cases where it makes complete sense. If there’s room to grow the market, and the product falls within your company’s core business, why wouldn’t you copy a success?   Nintendo dominated the video game console market for almost a decade when Sony launched PlayStation. The resulting competition only grew the market further. In fact Sony played follow the leader so well it ended up taking the leader’s spot.

Don’t change for the sake of change. We all know what happened to Coke when it messed with something that worked. If your product is still meeting consumer needs, provides a perceived value over competing products and continues to benefit the company, then you might want to do almost nothing. Evolution is good, however, as long as the essence of your product remains the same. The Sony Walkman has evolved from a cassette player to a CD player to an mp3 player, but all along it has stayed true to its “portable music listening device” roots.

Tell people about it. You should be planning your marketing program before your product is ready to launch.  And when you launch you’ve got to go big.  Xerox invented the personal computer yet failed to make a  success of it.

There are always going to be factors you could never have predicted – economic downturns, shifts in social values, political changes, and technological advances. So grab your rabbit’s foot, and good luck!

Arie Opps is President of Illuminate Marketing, a Toronto marketing firm specializing in marketing research, branding, and marketing strategy. Illuminate’s clients range from sole proprietors to Fortune 500 companies and include business owners, marketing research firms, and marketing managers and directors who require a reliable marketing outsourcing solution when their departments are overworked or understaffed. To contact Arie or learn more visit www.illuminatemarketing.ca.

Since this article was written in 2004, Interbrand has continued to be revered as the brand valuation source. This article suggests that Interbrand’s approach misses some of the great brands because it’s evaluating companies rather than brands.

I was at a marketing seminar recently where the presenter asked the group to try and name the world’s top brands. Although most of the group was made up of marketing professionals, we faired rather poorly in our task. The group was only able to correctly name about three or four of the top ten brands. This got me to thinking – where did this list come from and what did it take to become a ‘top brand?

It turns out that these rankings come from a widely referenced report published annually by BusinessWeek magazine in partnership with Interbrand, a branding consultancy. Interbrand has developed its own methodology for determining brand value. Brands are not valued based on traditional measures such as brand loyalty, recognition, or perceived quality. Interbrand’s methodology is more in line with a financial analyst’s than it is with a marketing researcher’s. Among other things, Interbrand determines a brand’s value by measuring projected earnings of the brand by looking at the percentage of overall revenues that result from the brand’s value. I would argue that Interbrand’s approach is a flawed one. This approach ignores tried and true brand valuation measures like brand recognition and brand quality. How much can a brand be worth if consumers’ aren’t familiar with the brand. And if a consumer does not perceive a brand to be superior to its competitors why would that consumer purchase it? You can’t find the answers to these questions on a balance sheet. You need to go back to traditional marketing research methods that involve asking consumers themselves. Shouldn’t the value of a brand be reflective of how that brand is perceived, or valued, within the minds of consumers rather than being derived from financial statements?

But the problems don’t stop there. Interbrand also sets rigid criteria when determining which brands can make the list. Brands must be ‘valued’ at over $1 billion, have a minimum of 20% of their sales outside of their home country, and have publicly accessible financial information. As a result only huge companies make the list rather than the ‘best brands’ as BusinessWeek refers to them.

A look at GE points out some of the problems with these rankings. GE is fourth on the list. Is GE really the fourth most valuable brand in the world? Go ask your average consumer what GE means to them. I’ll bet you get all kinds of different answers. They’re a light bulb manufacturer, they own NBC, they make clock radios. In fact, GE is in the business of aircraft engines, broadcasting, plastics, electronics, and insurance, just to name a few. If you ask me GE isn’t a strong brand at all – it isn’t clear at all what the GE brand stands for. GE is multi-billion dollar conglomerate. It is the name of a huge corporation not of a brand. This is clearly a case of the value of the company getting confused with the value of the brand. Evidence of this lies in the fact that six car manufacturers made the list. How strong can a brand be if five competing brands outrank it?

This criteria unfairly pits brands from large industries against brands from significantly smaller industries. It would make sense to only allow two to three brands per industry in the rankings. That would really show who the top brands are. A look at who didn’t make the list illustrates the flaws in this methodology. Take Palm for example. Palm invented the PDA category. Palm is the dominant PDA brand with a market share of 30% – 35%, roughly twice that of its nearest competitor (which ironically is Hewlett-Packard, a brand that did make the list). Is Palm not a great brand?

“So what?” you may ask, “It’s only a list”. But the problem is that we love lists – we refer to lists all the time. References to this list can be found everywhere; on company websites that boast that they made the list, on industry websites, and in business magazines from Fortune to Forbes. What ends up happening is that the brands that made the list are erroneously held up as examples of the ‘best brands’. Last year, The Globe and Mail published an article lamenting the fact that no Canadian brands had made the coveted list. Does this mean that there are no great Canadian brands? Not at all. It’s just that they aren’t big enough to meet Interbrand’s criteria. And when it comes to brands, size shouldn’t matter. What does matter is what’s in the mind of the consumer.

So next time you hear someone refer to the top brands in the world ask them where they found such information. Then tell them to go ask a consumer instead.

Arie Opps is President of Illuminate Marketing, a Toronto marketing firm specializing in marketing research, branding, and marketing strategy. Illuminate’s clients range from sole proprietors to Fortune 500 companies and include business owners, marketing research firms, and marketing managers and directors who require a reliable marketing outsourcing solution when their departments are overworked or understaffed. To contact Arie or learn more visit www.illuminatemarketing.ca.