Branding matters

This week the news has been dominated by the Euro crisis, which appears to have claimed a new high profile victim, Silvio Berlusconi. It will be interesting to see how he handles his exit if he exits at all; one thing is certain, this drama has more acts to come and the repercussions will echo for years.

However it’s not Europe that has caught my eyes and ears this week but branding; or rather more specifically, a podcast on Hedge Funds Review (HFR) (http://tinyurl.com/cp8hcf7), between Margie Lindsay and Donald Steinbrugge, of Agecroft Partners about branding.

The assertion of the podcast was; “Strongly branded hedge funds are attractive to investors and are attracting the most net asset flows. Once achieved, a strong brand enhances a hedge fund’s ability to raise and retain capital.”

It’s rather hard to argue with this assertion, so I was interested to hear what Mr Steinbrugge had to say on the topic. If you were seeking brand insight I’m not sure that assertions such as; branding is “an investors view of the quality of a hedge fund”, or that “hedge funds with the strongest brands are those with household names” or indeed that “the definition of brand will change over time” would help you particularly, for all that Mr Steinbrugge had much that was valid and useful to say about what matters when you are selling hedge funds.

So if you are looking to build a brand how to define it? I would suggest that brand is a personality that identifies the product, service or company – an identity. That identity is depicted visually by a logo; however it is formed by the values, processes, people, ambitions and capabilities of the company. The idea is to stand out, to create an identity that has characteristics and qualities that make it unique. What then counts in marketing terms is how the market and/or your clients perceive that identity.

I do agree with Mr Steinbrugge that an investor’s view of the quality of a hedge fund can indeed be shaped by brand. For instance, if you get in to a car with a driver that preaches caution you wouldn’t expect to drive towards a wall at 150mph. If you get in with a driver who tells you that speed is good but it’s the breaks that really count (& you still get in the car) you would enjoy the ride.

Steinbrugge notes that the institutional market works on the basis of exclusion, the wrong wording in an RFP will count for more than the best possible performance, so not to underestimate how important messaging and articulation are. Consistency and the ability to articulate the strengths of your product are, as he notes, key.

When looking at rebranding companies often approach design agencies that specialise in brand. There will be a focus on the visual representation of the identity, and often some ‘core values’ that inform that identity, for instance; leadership, innovation, beneficially-conservative, results-orientated. What is missing is the experience. What are the characteristics and the narrative that staff, the market and clients can understand? The proof points that illustrate rather than dictate?  And the benefits that indicate how a relationship with a brand will make a difference to the client?

In my view these are the elements of brand that really count. Without them companies can’t communicate who they are, what they do, how they differ and why that matters.