Brand equity and how to lose it

Howard Lake | 14 April 2011 | Blogs

Amongst the ongoing debates around business and charity branding, I’ve not seen much discussion around the concept of brand equity. As defined by Wikipedia, this is:

“The commercial value that derives from consumer perception of the brand name of a particular product, rather than from the product or service itself.”

For non-profit organisations, this will effectively translate to the sum total of the reasons people support, trust or work with you when they have a choice not to.
Basically, what you do, how you do it and how you represent yourself to the outside world which underpins your attraction to various audiences. So when an organisation has successfully spent years building these reasons for its target audience to trust and engage with it, there can be a significant risk that any change in their brand might undermine these reasons and put future success in jeopardy. In reality, a change of name and colour palette does not generally undermine brand equity. For example, I don’t believe The Army Benevolent Fund’s fundraising and volunteer efforts will be damaged by their change of name to ABF The Soldiers’ Charity.
Similarly, if the RNLI (one of the most successful fundraising outfits in the UK) changed its name to ‘Lifeboats’ and its core colours to green next week, I can’t see their supporters withdrawing their patronage. In both cases this is because these charities have built brand equity with their supporters and beneficiaries. They have consistently delivered what they are about in the eyes of their target audiences and have therefore earned the right to be ‘trusted’ with continuing to do so.
They walk the walk and their audiences agree.
In his blog this week Jeff Brooks talks about the key facet of brand being the audience’s perception of an organisation rather than any internal or brand guideline-derived view (although the blog implies that the only key audiences are donors and I believe beneficiaries and other stakeholders have a bearing too).
The audience is indeed king in this equation but that’s not to say they are always right and that brands should bend and flex to consumer whim every time the wind changes direction. Equity takes time to build so the most successful organisations steer it in the direction they need their brand to take them, in line with their future objectives and plans. Always being mindful of the benefits their track record brings but ensuring their history is used as a springboard to the future, not a millstone.
The best example I know of is Cancer Research UK which was itself formed by the merger of two large charities not so long ago. A few years on and the organisation has grown and continues to support ground-breaking research concurrently with running some of the most well-supported fundraising activities in the country. Many critics of branding argue that it adds no financial value but I counter this point with the simple fact that, like any process, it has to be executed well to work well. Cancer Research UK has raised over £1.7m since it re-branded and its volunteer numbers continue to grow.
Other charities and commercial organisations haven’t been so successful in getting this balance right – I won’t name names to protect the innocent but we’ve all seen a few examples recently.
That said, a great example of how to potentially waste brand equity appeared this week in the shape of British Airways. The airline announced in trade press that it is about to embark on a ‘re-launch of its brand but is keeping details under wraps until the autumn’. I would suggest that whilst they are suffering industrial action from staff, consequently having to cancel flights and facing the resultant customer backlash, now is not the time to be spending money on a big-London-agency-rebranding exercise. They should perhaps get back to walking their walk first?
What do you think?
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