Brands Create Customers

Laura Ries set off a mini-firestorm recently when she wrote that a company’s success depended more on its “brands” than on a company’s own products and people. Her exact words were, “Building strong brands is the key to success, in our opinion, not better products or better people.”

This is a strange, almost antediluvian view of brands. Companies and products are considered to be identical in essence and in output, no matter how they operate or how hard they innovate. Only “brands” make a difference. They’re like a value add-on. And only when a “brand” is applied do customers take notice and sales take off.

This concept of “brand” decouples brands from the real factors of company integrity, product/service quality and employee commitment. In fact, it pretty much divorces brand success from a company’s core competence, and its edge competence. The brand is thus external to the business. It’s sort of pasted on, or applied like a fancy wrapper. Basically, it can be nothing more than effective make-believe, the end-product of advertising and PR campaigns. In this view, brands are not an organic expression of the company.

Frankly, (and thankfully) brand models like this withered away decades ago. Not only do they diminish a company and its employees, they also demean customers, who are increasingly integrated into proactive brand practice.

Tom Asaker rightfully takes issue with Laura’s remarks, and his readers join in. Laura’s response doesn’t help.

As I see it, the real danger in this approach is that it pulls brands away from the core of a company. Brands are not add-ons. Brand building is a value creating process at the heart of a company, integrating R&D, design, products and customers. From the brand core come value innovation and customer creation. Both are central to a company’s mission and capabilities.

This entry was posted on Monday, February 27th, 2006 at 11:52 am and is filed under Fundamentals. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.