You must build a brand before you can build profits

by Tony Fannin, President, BE Branded  |

Before, marketing meant how to advertise, to ring the cash register and to drive revenue. It was as simple as that. Before, marketing meant advertising. Back then, branding wasn’t even a consideration. Today, many businesses claim to believe in branding, but they really only believe in marketing. Many complain that advertising and marketing doesn’t work since it didn’t ring the cash register and branding is too “soft” and doesn’t drive revenue. The problem isn’t the concept of branding or marketing. Too many businesses don’t really understand the relationship of brand to revenue and thus they are misguided in their expectations.

Marketing today is too broad of a term to completely define it in simple tactics. Traditional advertising is marketing. Social media is marketing. Even your people are marketing. What really drives revenue today is branding. It’s really not the function we call marketing. It’s branding that makes a company unique. It’s branding that separates a product from the masses of commodity. It is branding that is worth hundreds of millions of dollars in market cap.

Branding has become the most important aspect of ANY business. If you don’t believe that, then my guess, you’re one of a 1,000 companies who sell the same widget, is nothing special, and are fighting over pennies in a price war. In other words, a commodity. Here is the formula for successful business: Branding first, sales and profit second. If you build a brand, then you can decide how to build a profitable enterprise around it. Brand is what makes sales easier and increases volume. Let’s take one of the biggest problems in selling a product, distribution. You say, “carry my product and it will be famous.” Distribution says, “Make your product famous and we’ll carry it on our shelves.” (both physical and digital shelves) Distribution cuts to the core of the matter.

Let’s take Amazon.com for example. With all of Amazon’s success, people forget they lost money for their first 9 years. They didn’t break even until year 15. They didn’t put profits and sales first. Jeff Bezos believed in creating a great brand first. Jeff believed, if he created a great brand, profits will follow. Compare that to Barnes & Noble’s. They came out with an e-reader in the late 1990’s and introduced an e-bookstore in 2001. Sales were disappointing early on, so they discontinued both programs. Big mistake. This allowed Amazon to jump ahead because Jeff Bezos didn’t stop branding and marketing even though it wasn’t yet profitable. He understood that by building a great brand, he would turn Amazon from losing money to being one of the most valuable brands today. Now Barnes & Noble’s are playing catch up in a category they should have been light years ahead.

If there’s an iron-clad rule in marketing, it is this: Brands are built by being first in a new category. Not just first in the marketplace, but first in the mind. That’s why a new brand pioneering a new category has to stick around long enough to penetrate the minds of potential customers. This explains why great brands like Facebook, Twitter, and Linkedin, who are all still losing money, have valuations billions of dollars more than most brands who are very profitable.

People and investors pay more for a great brand than a great commodity.

www.bebranded.net
317-797-7226

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About Be Branded

Tony Fannin is of President of BE Branded, an integrated marketing firm who helps clients BE Somebody to their customers. If you aren't somebody, then you are commodity.

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