Branding is the process of creating distinctive and durable

perceptions in the minds of consumers. A brand is a persistent,

unique business identity intertwined with associations of

personality, quality, origin, liking and more. Here’s why the

effort to brand your company or yourself pays off.

1. Memorability. A brand serves as a convenient container for a

reputation and good will. It's hard for customers to go back to

"that whatsitsname store" or to refer business to "the plumber

from the Yellow Pages." In addition to an effective company

name, it helps when people have material reminders reinforcing

the identity of companies they will want to do repeat business

with: refrigerator magnets, tote bags, datebooks, coasters, key

rings, first aid kits, etc.

Memorability can come from using and sticking with an unusual

color combination (FedEx's purple and orange), distinctive

behavior (the gas station whose attendants literally run to

clean your windshield), or with an individual, even a style of

clothing (Author Tom Wolfe's white suits). Develop your own

identifiers and nail them to your company name in the minds of

your public.

2. Loyalty. When people have a positive experience with a

memorable brand, they're more likely to buy that product or

service again than competing brands. People who closely bond

with a brand identity are not only more likely to repurchase

what they bought, but also to buy related items of the same

brand, to recommend the brand to others and to resist the lure

of a competitor's price cut. The brand identity helps to create

and to anchor such loyalty.

Consider the legions of car owners who travel up to 2,000 miles

at their own expense to attend a Saturn celebration at the

company's plant in Spring Hill, Tennessee. That's loyalty. And

supposedly, more people have the motorcycle brand

"Harley-Davidson" tattooed on their body than any other brand

name. That's out-of-this-world loyalty.

3. Familiarity. Branding has a big effect on non-customers too.

Psychologists have shown that familiarity induces liking.

Consequently, people who have never done business with you but

have encountered your company identity sufficient times may

become willing to recommend you even when they have no personal

knowledge of your products or services. Seeing your ads on local

buses, having your pen on their desk, reading about you in the

Hometown News, they spread the word for you when a friend or

colleague asks if they know a ____ and that's what you do.

4. Premium image, premium price. Branding can lift what you

sell out of the realm of a commodity, so that instead of

dealing with price-shoppers you have buyers eager to pay more

for your goods than for those of competitors. Think of some

people's willingness to buy the currently "in" brand of bottled

water, versus toting along an unlabeled bottle of the same stuff

filled from the office water cooler.

The distinctive value inherent in a brand can even lead people

to dismiss evidence they would normally use to make buying

decisions. I once saw one middle-aged Cambridge, Massachusetts,

intellectual argue to several colleagues that Dunkin' Donuts'

coffee tastes better than Starbucks'. So contradictory was this

claim to the two companies' reputations for this demographic

group that the colleagues refused to put the matter to a taste

test.

5. Extensions. With a well-established brand, you can spread

the respect you've earned to a related new product, service or

location and more easily win acceptance of the newcomer. For

instance, when a winery with a good reputation starts up

regional winery tours, then adds foreign ones, each business

introduction benefits from the positive perceptions already in

place.

6. Greater company equity. Making your company into a brand

usually means that you can get more money for the company when

you decide to sell it. A Coca-Cola executive once said that if

all the company's facilities and inventory vanished all around

the world, he could walk into any bank and take out a loan

based only on the right to the Coca-Cola name and formula.

7. Lower marketing expenses. Although you must invest money to

create a brand, once it's created you can maintain it without

having to tell the whole story about the brand every time you

market it. For instance, a jingle people in your area have

heard a zillion times continues to promote the company when

it's played without any words.

8. For consumers, less risk. When someone feels under pressure

to make a wise decision, he or she tends to choose the

brand-name supplier over the no-name one. As the saying goes,

"You'll never be fired for buying IBM." By building a brand,

you fatten your bottom line.