I’ve seen a shift in parent companies placing an emphasis on building up the corporate brand, rather than promoting individual product brands. That’s important because in this day and age, companies need to act more human and less like faceless institutions. Making and selling reliable products are no longer enough. Customers want to know the story and purpose behind the brand.
Beyond nurturing a long-term connection to customers who in-turn can develop into loyal brand ambassadors, telling the corporate story signals where you are going, what you will provide in the future and how you will behave.
Besides the marketing benefits of having a strong corporate story, investing in the corporate parent can help in the following ways:
• Deepens understanding of the value in the offering. Smart corporate marketers are taking cues from the simplicity and uniformity that has powered the success of companies like IBM, Federal Express and Apple. These marketers have made a powerful case for managing fewer messages, names and identities. Each of these companies took big leaps into new areas, yet they did it via a conscious strategy not to dilute the parent brand, but to invest in it gradually as the business expanded.
• Enhances pride for employees. Today’s employees are less loyal than they were a decade ago, but at the same time workers and managers are “badged” with their employer’s brand like never before. Having a clear corporate story that resonates with employees and recruits is just as important as a resonant story for product brands. IBM and General Electric Co. have even put employees at the center of their ads, connecting the purpose of their employees to the products they make.
• Reduces reputational risk. Addressing reputational problems can incur a significant expense, and brands with a strong parent identity can weather the storm more effectively. Toyota built its brand equity over many years and endured its brake quality issue much better than a competitor might have. The Toyota corporate brand had some of the highest ratings in the automotive sector, and that the company managed to bounce back to prior customer satisfaction levels only a year after the quality issue surfaced, according to our BrandView data.
• Increases value in M&A activities. We have seen advantages in the financial markets, both for buyers and sellers. Research shows that a strong corporate brand can enhance value, as the brand can help signal the quality and reliability of earnings, and the future growth potential of the company. For buying companies, the enhanced economics of being able to quickly fold an acquired company under the parent name can yield significant synergies.
Companies considering this marketing change should ask themselves a few questions: How strong is your corporate brand today? Does it lend strength to the products and services it sells? Does your corporate story capture the true personality of your team? Can your parent brand story take you through to the next level of growth? Let the answers to these questions be your guide as you consider how to take your corporate brand to the next level.