What tha heck is branding?

I’ve been writing about branding and I realize that it seems to me that there is a misconception of what branding really is amongst my readers. Most relate branding to “have a known name” while others think of logos and visual identity. Branding is however much more than that.

The objective of branding is not to be known. Branding is to be LOVED!

Almost everybody has heard of the Toyota Prius, but how many people would actually BUY one? (See my last blog post).

A successful branding is the most powerful marketing tool in existence. When you achieve it you have your customers doing marketing for you, selling your product/service! It sounds like a dream but this is the core of the so-called Viral Marketing.

The objective of branding has surpassed selling specific products or services, branding is selling “the idea of the company”. With a successful branding the relationship with customers evolves towards a “deeply felt affection”, which again results in:

• High customer loyalty – churn reduced to basically “null”
• Reduced marketing costs – customers get so excited about your company that they sell it to other customers

In the most extreme branding cases we have Apple. Apple has become an iCult and their customers have a near-religious relation to the iBrand and its products – which spreads like rings in the water. Apple launches are expected with great excitement, it is followed on-line, and it is followed minute by minute on Twitter! See the last launch of the iPad. There is nothing really new about it. It is an iPhone the size of a laptop. But there are already large queues of excited people waiting to buy it, people with both iPhones and laptops. We don’t really need it but we must have it (myself included)!

At the other side we have Nokia. Great reliable products with outstanding technology, fantastic intuitive usability, probably the most selling mobile phones in the world. When you have tried a Nokia it is hard to get used to another mobile phone. Unless it is an iPhone…

Nokia even has its own Smartphone which is probably as good as or even better than the iPhone. So why on earth is there no hype around Nokia’s Smartphones while people are killing eachother over the next generation iPhone? Because Nokia users are not “in love” with the Nokia idea, and iPhone users are! Nokia is a well known and respected name and the undisputed market leader when it comes to mobile phones, but unless it accomplishes selling the “idea of Nokia”, getting users to fall in love with it, it will lose terrain to the iHype.

Nokia today has 40% of the cell phone market, but how will the future look? Will Nokia be able to keep their position when faced with new strong well branded and agile competitors entering their market? Will they be able to grow market share and increase sales without the “love effect”? Will they be able to create the product stickiness or will they see an increase in churn, in disloyalty?

Branding Love-effect maths:

I know nobody will actually do the maths, but for the sake of understanding how it works, here it goes

“Love Effect”= [experience with brand – original expectation]

In very simplified terms, a powerful branding is dependent of the company’s ability to sell their business idea and the quantity of people affected by the “Love Effect”.

Of course there are a number of factors that are essential for a viral idea to work and turn it into a successful branding. Seth Godin has written “Unleashing the Idea Virus” (2000) which is great literature to understand the mechanisms of viral marketing (even though the the book desperately deserves to be updated with Social Media Trends anno 2010).

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