The Brand Gap: Revised Edition (2nd Edition) [Paperback]

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First of all, a brand is not a logo. The term LOGO is short for LOGOTYPE, design-speak for a trademark made from a custom-lettered word (LOGOS is Greek for WORD). The term logo caught on with people because it sounds cool, but what people really mean is a trademark, whether the trademark is a logo, symbol, monogram, emblem, or other graphic device. IBM uses a monogram, for example, while Nike uses a symbol. Both are trademarks, but neither are logos. Clear? What really matters here is that a logo, or any other kind of trademark, is not the brand itself. It's merely a symbol for it.

Second, a brand is not a corporate identity system. An identity system is a 20th-century construct for controlling the use of trademarks and trade-dress elements on company publications, advertisements, stationery, vehicles, signage, and so on. Fifty years ago, lithography was the communication technology du jour; identity manuals were designed to dictate the sizes, colors, spacing, and architecture of the printed page. Today there's still a need for identity manuals and the visual consistency they bring. But consistency alone does not create a brand.

Finally, a brand is not a product. Marketing people often talk about managing their brands, but what they usually mean is managing their products, or the sales, distribution, and quality thereof. To manage a brand is to manage something much less tangible—an aura, an invisible layer of meaning that surrounds the product.

So what exactly is a brand?

A brand is a person's gut feeling about a product, service, or company. It's a GUT FEELING because we're all emotional, intuitive beings, despite our best efforts to be rational. It's a PERSON'S gut feeling, because in the end the brand is defined by individuals, not by companies, markets, or the so-called general public. Each person creates his or her own version of it. While companies can't control this process, they can influence it by communicating the qualities that make this product different than that product. When enough individuals arrive at the same gut feeling, a company can be said to have a brand. In other words, a brand is not what YOU say it is. It's what THEY say it is. . A brand is a kind of Platonic ideal—a concept shared by society to identify a specific class of things. To use Plato's example, whenever we hear the word "horse" we visualize a majestic creature with four legs, a long tail, and a mane falling over a muscular neck, an impression of power and grace, and the knowledge that a person can ride long distances on its back. Individual horses may differ, but in our minds we still recognize their common "horseness." Looked at from the other side of the equation, when we add up the parts that make a horse, the total is distinctive enough so that we think HORSE, not COW or Bicycle.

A brand, like Plato's horse, is an approximate— yet distinct—understanding of a product, service, or company. To compare a brand with its competitors, we only need to know what makes it different. Brand management is the management of differences, not as they exist on data sheets, but as they exist in the minds of people.

The idea of brand has been around for at least 5,000 years. So why is it such a big deal now?

Because as our society has moved from an economy of mass production to an economy of mass customization, our purchasing choices have multiplied. We've become information-rich and time-poor. As a result, our old method of judging products—by comparing features and benefits—no longer works. The situation is exacerbated by competitors who copy each others' features as soon as they're introduced, and by advances in manufacturing that make quality issues moot.

Today we base our choices more on symbolic attributes. What does the product look like? Where is it being sold? What kind of people buy it? Which "tribe" will I be joining if I buy it? What does the cost say about its desirability? What are other people saying about it? And finally, who makes it? Because if I can trust the maker, I can buy it now and worry about it later. The degree of trust I feel towards the product, rather than an assessment of it's features and benefits, will determine whether I'll buy this product or that product.

The history of American currency provides a good demonstration of how trust relates to branding. After the Revolutionary War, when paper money was reduced to a fortieth of its previous value, gold and silver were the only types of currency people could trust. It was nearly a hundred years before people were willing to accept Silver Certificates as a substitute for the real thing, even though the new bills were backed by metal reserves. It took another hundred years before we were ready to accept Federal Reserve Notes as a substitute for Silver Certificates. These weren't backed by reserves at all, but by pure faith in the brand called America. Now we've learned to trust in a system of credit cards for a large percentage of our transactions. Will we soon be ready to accept international cybercurrency as an improvement on credit cards? Sure, if we can trust it.

Trust creation is a fundamental goal of brand design. The complex flourishes and intricate images employed in the design of the Silver Certificate were no accident—they were conscious attempts to encourage trust in what was little more than a symbol for money.

The concept of trust is equally important when we trade our currency—whether metal, paper, plastic, or cyber—for goods and services. Trust is the ultimate shortcut to a buying decision, and the bedrock of modern branding.

Can you place a dollar value on your company's brand? You can certainly try, and for some companies the estimates are astonishing. The brand consultancy Interbrand routinely publishes a list of the top 100 global brands by valuation. The leader today is Coca-Cola with a brand worth of nearly $70 billion, which accounts for more than 60% of its market capitalization. Halfway down the list is Xerox with a brand valuation of $6 billion—a whopping 93% of its market cap.

If a company's brand value is such a large part of its assets, why isn't it listed on the balance sheet? Good question. But while companies ponder this, they're already using brand values as tools to obtain financing, put a price on licensing deals, evaluate mergers and acquisitions, assess damages in litigation cases, and justify the price of their stock.

There's an old saying in business, "What gets measured gets done." As brands become more measurable, companies are focusing on ways to increase their value.

One way is to follow the example of currency: Use design to encourage trust.

So far, the eye-opening valuations on Interbrand's list have happened as much by chance as by design. While the figures undoubtedly represent a huge investment in time, energy, money, and study, they're mostly a side effect of caring more about sales, service, quality, marketing, and the myriad other things that occupy a business. For most of us, brand happens while we're doing something else.

But what if you could isolate brand from those other endeavors? What if you could study it, measure it, manage it, and influence it, rather than just let it happen?

This is precisely what companies are trying to do. They're appointing brand managers, who are building brand departments, which are populated by brand strategists, who are armed with brand research. What they're discovering, however, is that it takes more than strategy to build a brand. It takes strategy and creativity together.

Which brings us to the premise of this book.

Strategy and creativity, in most companies, are separated by a mile-wide chasm. On one side are the strategists and marketing people who favor left-brain thinking—analytical, logical, linear, concrete, numerical, verbal. On the other side are the designers and creative people who favor right-brain thinking—intuitive, emotional, spatial, visual, physical.

Unfortunately, the left brain doesn't always know what the right brain is doing. Whenever there's a rift between strategy and creativity—between logic and magic—there's a brand gap. It can cause a brilliant strategy to fail where it counts most, at the point of contact with the customer, or it can doom a bold creative initiative before it's even launched, way back at the planning stage.

The gulf between strategy and creativity can divide a company from its customers so completely that no significant communication passes between them. For the customer, it can be like trying to listen to a state-of-the-art radio through incompatible speakers: The signal comes in strong, but the sounds are unintelligible.

There are two ways to look at the brand gap: 1) it creates a natural barrier to communication, and 2) it creates a natural barrier to competition. Companies who learn how to bridge the gap have a tremendous advantage over those who don't. When brand communication comes through intact—crystal clear and potent—it goes straight into people's brains without distortion, noise, or the need to think too much about it. It shrinks the "psychic distance" between companies and their constituents so that a relationship can begin to develop. These gap-crossing, distance-shrinking messages are the building blocks of a charismatic brand.

You can tell which brands are charismatic, because they're a constant topic in the cultural conversation. Brands such as Coca-Cola, Apple, Nike, IBM, Virgin, IKEA, BMW, and Disney have become modern icons because they stand for things that people want—i.e., joy, intelligence, strength, success, comfort, style, motherly love, and imagination. Smaller brands can also be charismatic. Companies such as John Deere, Google, Cisco, Viking, Palm, Tupperware, and Trane all exert a magnetic influence over their audiences. When an AC contractor reads the tagline, "It's hard to stop a Trane," he thinks, "Damn straight."

A charismatic brand can be defined as any product, service, or company for which people believe there's no substitute. Not surprisingly, charismatic brands often claim the dominant position in their categories, with market shares of 50% or higher. They also tend to command the highest price premiums—up to 40% more than generic products or services. And, most important, they're the least likely to fall victim to commoditization.

Among the hallmarks of a charismatic brand are a clear competitive stance, a sense of rectitude, and a dedication to aesthetics. Why aesthetics? Because it's the language of feeling, and, in a society that's information-rich and time-poor, people value feeling more than information.

Aesthetics is so powerful that it can turn a commodity into a premium product. Don't believe me? Look at Morton. Ordinary table salt is the ultimate commodity—unless it has a little girl on the package.

There are no dull products, only dull brands. Any brand, backed by enough courage and imagination, can become a charismatic brand. But first you need to master the five disciplines of branding.