A company's intangible assets, including its brand, may represent up to 80 percent of its corporate value, according to the United Nations' World Intellectual Property Organization. But many small businesses don't protect their brands legally in a manner commensurate with their potential monetary worth. Branding and intellectual property experts Anne H. Chasser and Jennifer C. Wolfe hope to change that with their new book, Brand Rewired (Wiley, July 2010). Chasser, former trademarks commissioner at the U.S. Patent and Trademark Office, and Wolfe, an intellectual property attorney and founder of Wolfe law firm in Cincinnati, spoke recently to Smart Answers columnist Karen E. Klein. Edited excerpts of their conversation follow.
Karen E. Klein: Your book focuses on how mega-corporations such Procter & Gamble (PG) built billion-dollar brands. What can small startup businesses learn from it?
Jennifer C. Wolfe: We also talked with companies that have been around for relatively short times, like Yahoo (YHOO) and Google (GOOG). The thing is, at any one time, even huge companies like P&G were startups. Our focus is on how to build a culture of strategic collaboration and return on investment by branding. Whether a company is maintaining a brand that has endured for more than 100 years, such as Tide, or creating a new brand, a rewired branding process can provide competitive advantages.
What are those advantages?
Wolfe: Particularly for small businesses, the power that a brand brings in terms of customer recognition and loyalty can be long-lasting.
Chasser: Building a brand is the same whether you're P&G or you're starting up a new company. When you think about branding as part of the total package of what you want to achieve, it's easier to do, and it will cost you less money.
How early should an aspiring entrepreneur think about branding?
Chasser: Even in the business plan, you need to think about branding and marketing as much as you think about financing and market research. If you do it right, you'll build something a lot stronger.
Can you really brand a company or product before you're in business?
Wolfe: As you're getting started, take a strategic pause. Think about the identification you want your customer to make with your product. Analyze the kind of brand you're creating and figure out how it will play out in your business. Ask such questions as, "Where does this give me long-term value, in terms of revenue, licensing, franchising, and other areas?"
What examples did you find where companies had done this particularly well?
Wolfe: The ones that do it well create iconic brands, and then they protect them as intellectual property assets. Think about Tiffany (TIF) and what its trademarked blue box means. Think about the Coca-Cola (KO) bottle, which is trademarked. Nobody else can create a bottle like that.
Chasser: Post-it (MMM) has protected the color yellow that they use for their notes. The idea is to create something distinctive about your brand, something that tells customers they know what they will be getting. What's invaluable is the long-term impact it can have.
Wolfe: We recommend that you look at all of the factors around your brand, whether it's special sounds—like the NBC chime or the Yahoo yodel—a specific design, the look and feel of your product, or the way customers connect with it. All those things can be protected as IP assets.
Isn't branding a deeper concept than just a company's trademarked design or logo?
Chasser: The brand essence is the consumer's experience around that brand. The logo and the company colors are identifiers. They're the quick image that somebody would look at and recognize that it speaks for everything else the brand stands for. So the logo is really important, but it does go much deeper.
The book talks a lot about strategic collaboration around branding. What do you mean by that?
Wolfe: In researching the companies in our book, particularly those that have created billion-dollar brands, they were able to create a better outcome by bringing in collaborators from across the business early on.
Chasser: If you look at the entire suite of branding opportunities early in the startup process, you can make decisions on what to invest in based on your financial situation. Often, branding and IP protection are afterthoughts. Think about collaborations with your financial team, your legal team, bringing in market research and consumer insights—the entire team of folks building the business.
Wolfe: Small businesses don't often have somebody tying this all together for them strategically: the cool creative stuff and the legal protections. We want entrepreneurs to think about the end goal—like licensing your brand around the globe—right from the start.
How much does this cost, though, for startups on very tight budgets?
Wolfe: Actually, it will cost a lot less money if chief executives learn to ask the right questions earlier. Startup companies sometimes make major mistakes even though they're spending $10,000 or $100,000 with an ad agency on creating a campaign. I've even seen big companies spend a lot on things like that, but they find out later that the brand they've created is not that valuable, because they can't protect it everywhere they need to.