ROI By FJR:The Brand or the Brandisher?

R.O.I. By Frank J. Rich

The Brand or the Brandisher?

May 13th, 2013
By Frank J. Rich

 

Business-to-consumer sales favor a strong brand, largely because of the great variety of products in the marketplace. How might one distinguish between one can of peas and another? Is Andy Boy a better Rabi than the unbranded variety? Does one buy Cole Haan Red or Green label? Finally, why buy a Lexus when a Hyundai might be as good a car?; they look a lot alike.

 

Brands carry assurance that, at least by their popularity or celebrity, warrants a better product. Is White Rose cream cheese as good a product as Philadelphia brand cream cheese? Yes and no. If using it in a simple cake recipe or to flavor potato pancakes it will do. But if you’re using it as “smear” on a well-made water bagel, or as the main ingredient in a New York style cheesecake, it is not. Different products result from identical recipes using different qualities of ingredients.

 

So, how important is a brand to the success of a product, and how much energy ought a company invest in building one? Brands work hard at establishing trust in the quality of the product, at least in the emotional mind of the consumer. The more we “hear” about a brand the more likely we are to assume it is as represented; a higher quality product. We accumulate the view that more users of the product make it better than others. It’s based in some part on the availability heuristic we considered in a previous column. The more readily a product comes to mind, the more likely we are to rank higher its value to us.

 

Our natural tendency is to over-estimate how much others agree with us, assuming that our values and beliefs, preferences, likes and dislikes are common among those around us. This is called the false consensus effect and once cemented in the mind of a buyer it is near impossible to dislodge. But even before the view of others comes into play, we typically come to consensus with ourselves, a process that convinces us that launching from a particular platform – Andy is better broccoli – is not only “right” but the conclusion most around us would make. That is, unless we believe that broccoli from a local farm is the best that money can buy, and which may cost more, therefore signaling the false consensus effect to justify the added expense. Pardon my cognitive bias.

 

The false-consensus effect can be contrasted with pluralistic ignorance, “an error in which people privately disapprove but publicly support what seems to be the majority view, when the majority in fact shares their (private) disapproval. While the false consensus effect leads people to wrongly believe that they agree with the majority (when the majority, in fact, openly disagrees with them), the pluralistic ignorance effect leads people to wrongly believe that they disagree with the majority (when the majority, in fact, covertly agrees with them).”

 

To the point, the brands we create, first in our own minds and later in the minds of others, are a powerful influence on decision-making, largely the issue of the “emotional mind.” How then do brands measure against the skills of those given to represent them in the marketplace?

 

Certain types of people are key to the delivery of information and the ultimate conversion of a sale by it. Connectors, Mavens, and Salesman may indeed cause the “tipping point” now more commonly understood by virtue of Malcolm Gladwell’s book of the same title, but only if their skill sets are comprehensively applied and all else is equal. Each of these – the first of whom trade on their vast associations, the next, those who are relied upon as “information specialists,” and the last, those with powerful persuasive and negotiation skills- attempt to rival effective brands by creating “stickiness” and “context” from which to encourage a conversion or sale.

 

While some may succeed at outperforming the brand, the marginal return on resource steadily diminishes in human capital and conversely increases for brands. While the Pareto Principle (80% of the work is produced by 20% of the workers) certainly applies, the need for people to represent the value in a company’s products is veridical. The assumption that we cannot do without them, notwithstanding the marginal return on resource, may be delusion of the false consensus effect or pluralistic ignorance.

 

You choose!

Frank Rich is founder and CEO of Encore Príst International, an organizational development company that helps individuals and organizations reach their full potential through the practice of effective business fundamentals. You may reach him at fjrich@encoreprist.com, or by phone at 866/858-4EPI.

 

To read other ROIs in their entirety, go to Business tab at Town Link.

 

Bazzo 05/14/13

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