Thursday, September 24, 2015

Should You Share a Brand?

One morning you are catching up on the news online and stare open mouthed at a headline on Drudge accusing your company of refusing to serve police officers.  Within minutes the phone starts ringing with angry customers.  What is happening?  It is a nightmare.

You fight down the panic long enough to plunge into the story.  You hit Google to find other stories.  The story is spreading like wildfire across the Internet.  As you dig in, you realize that the story is not about your company per se.  It is about your brand.  It was the action of a knucklehead employee of a fellow franchisee.

If you think it is bad enough riding herd on your employees, imagine getting tarnished by people who do not even work for you.  This is exactly what happened to a local fast food franchise.  This is the risk of sharing a brand with other contractors.  No matter how stellar you and your team act, in only takes one knucklehead across the franchise system to stain everyone.

It could be much worse than a knucklehead.  Imagine a guy showing up in a brightly logoed company truck and murdering a pair of coeds in their apartment.  It happened.

Fortunately, murder and violent crimes are rare.  Bad service experiences, however, are far more common.  According to the Census, 40 million Americans move annually.  Nearly half move to a different county or state.  Newcomers who arrive in your market bring the biases from their past experiences, which admittedly can be good or bad.  Nevertheless, by sharing a brand you are giving up part of your ability to shape public perception.

The problem of shared brands is broader than franchise organizations.  A growing trend among local churches is to stand independent of the denominational brands, which can be affected by events beyond the local church’s control.  For example, 16 of the 20 largest churches in the Southern Baptist Convention do not use the word, “Baptist” in their name.  These churches are not running from their denomination, only from the shared brand.

You may have heard the term, “brand equity.”  According to, this is “a brand's power derived from the goodwill and name recognition that it has earned over time, which translates into higher sales volume and higher profit margins against competing brands.” 

If you build equity in a brand you own, you can enjoy the benefits forever, such as higher margins and ultimately, a higher sale price for your business.  Building equity in a brand you do not own is like depositing money in someone else’s bank account.  It may not be there when you want to withdraw it.

So what’s the lesson?  Simple.  Build your brand and no one else’s.  Do not rent a brand.  Do not license a brand.  Do not share a brand.  Own a brand.  Own and build a brand that is yours exclusively.  Make it valuable and enjoy the benefits.

© 2015 Matt Michel