The value of a brand is ultimately determined when a company is sold. The intangibility of a brand’s value shows up on the balance sheet as goodwill and it is determined by how well the current market knows and understands the brand. Most importantly, however, value is derived by the degree of upside the brand has to offer moving forward as it aims to maintain, or better yet, grow its loyal customer base.
Brand value is built on consumer loyalty, and loyalty is a measure of trust. The true value of a brand is created when a company builds trust.
According to a recent study by the Gustavson School of Business (June 2015), the following ten brands are the most trusted by Canadians:
- Tim Hortons
- President’s Choice
- Shoppers Drug Mart
- Canadian Tire
- Kraft Foods
- Campbell Soup Company
- Canada Post
- Johnson & Johnson
These results beg the question: how does a brand build trust?
Develop a clear position and value proposition.
Every trusted brand is connected to a good business. This means there is a definitive market position and there is value being added to a specific customer. The products and services listed above are also consumed on a daily or weekly basis meaning they are entrenched in the habits, and decision-making processes, of large segments of the population.
Automobiles, for example, are well known but not purchased on a regular basis, which means they can still be a trusted brand but probably won’t penetrate a top ten list anytime soon. The key is to consistently engage and bring value to your audience on a regular basis in order for them to include you in their regular life.
Build familiarity over time.
A trusted brand needs to be well known. Psychologically, the more familiar something is the more people associate it with positive feelings. Notice that besides Google, every other brand on that list is over 30 years old and are national players that spend heavily on advertising activities.
I always recommend that emerging brands start small. Saturate regional geographies first, or small niche segments, before expanding in order to maximize limited advertising dollars and build a loyal following that will aid word-of-mouth activity as they expand.
Connect on core values and culture.
It’s not enough to have a good product – everyone has that. Good brands choose specific values, lifestyles or cultural cues to create points of authentic connection with those they aim to serve.
Tim Horton’s, with its Canadian roots, has naturally chosen to go deep with hockey—as evident through their NHL celebrity endorsements, Timbits hockey programs, and every commercial showing someone in a local arena. Similarly, Scotiabank is making a smart move by associating themselves with movies thus connecting the positive feelings of being entertained with their products and services.
Choosing core values such as ‘Canadian spirit’ or ‘courage’ or ‘team players’ can help small, local brands choose attractive activities to associate their brand with. For example, a local insurance company can build their brand on ‘teamwork’ and infuse that value into advertising and community activities such as youth hockey and even take large clients to professional hockey games to see ‘teamwork’ in action.
Building brand trust is a long-term game but the payoff is huge if your goal is to be in a specific market for a long period of time or you want a lucrative exit strategy.
Have a great day!