Brand is an Intangible Asset
If there’s one misconception I’d absolutely love to beat out of the World Wide Web it’s the one about logo and brand. Why? Because they’re different… logo is a tangible asset that can be stolen, replicated or followed by your competitors. Brand is intangible… difficult to replicate… impossible to steal.
Understand Brand
Let’s think about working as a freelance web designer or coder or photographer. All of the characteristics of your product or service create a perception in the mind of customers and industry players. Brand lives not in your company… brand lives in the minds of the people in your market.
One thing freelancers and small businesses (don’t get me started on artists) need to realise is that everything they do affects their brand. If they leave home in grubby track pants with smelly runners versus leaving home looking like a million dollars – it affects perception in their market. The same goes for calling out a dick in a forum or giving a helpful hand to a newbie. It affects their brand.
When you think of the brand NIKE what enters your head? Or Coke? Or Qantas? It’s not the product or the logo exactly… it’s a fuzzy feeling of what people perceive to be NIKE, Coke and Qantas. When you think about Australia Post the important criteria is your perception and not the actual nature of the company.
Understand Brand Equity
But blah-de-blah about the brand stuff. Where the rubber meets the road is in the traction your brand has (positive or negative) in the market. This is brand equity.
The easiest way of thinking about brand equity is to consider what that brand means in real terms in your market’s mind. How useful is it (in a positive or negative sense)? You could say brand equity is the inherent value of the brand that can be built up and lost over time. So it’s not enough to have a brand… you need brand equity, which is the value associated with the brand to your business or its customers.
Why is Brand and Brand Equity Important?
Your logo can be copied. Your business processes can be replicated. Your uniforms, designs, office location, finance… anything physical at all… can be reproduced by your competitors and there is really nothing you can do about it except scream to the feeble courts for IP violation or cry about your misfortune. This brave new world of business is about easy replication on a global scale and access to resources – learn to live with it.
If you have an invaluable employee – or you are an invaluable employee – they could be working at a competitor’s company tomorrow. Skills are transferable and poach-able – look at how effective cross-pollination is in Silicon Valley, probably more so than concentrated venture capital investment.
So you should realise by this point that tangible assets aren’t going to provide you with any sustainable competitive advantage. It’s not enough that you make the best websites in the world… tomorrow 100 people will be as good. The real deal of business is in building brands and developing brand equity. These are the intangible assets.
How hard do you think it is to work out how to replicate strong business relationships or the synergies between people in a company. Or the perception of a competitor’s customer about their service? It’s impossible. Just pick your best competitor and spend a week trying to steal his best customers – it won’t work.
At the end of the day brand and brand equity and other intangible assets are the areas you really need to focus on strategically. They are the only areas that offer the opportunity to achieve long-term competitive advantage in your market.
So stop obsessing on the physical artifacts you create as a business and go build some personal relationships. Make yourself all about authentic brand in the minds of your market.
