Despite the omnipresence of brands in our globalized world, many entities seem to struggle with the concept of branding and thus fail to enjoy its benefits – so what is branding and how to build a strong brand?
Calin Hertioga, Executive Director for Brand Economics at Interbrand, takes us through how places should approach branding to create and deliver a relevant experience that differentiates them from the rest. He further illustrates that, to thrive in a competitive environment, cities, regions and destinations must foster a connection with the audience, influencing what they feel, what they remember and what they do.
Calin, having been with Interbrand for almost 12 years – now as Executive Director for Brand Economics – brands are your daily business. Briefly, how would you explain “brand” and “branding” to someone not yet familiar with those two terms?
A brand is the sum of all expressions through which an entity intends to be recognized. An “entity” can be a person, an organization, a business unit, a community, a city or a nation.
Branding is the act of creating and orchestrating expressions by which the entity intends to be recognized.
This goes back to the origin of the word – “brandr” meant marking livestock to identify the owner. The meaning of the word hasn’t changed, just the multitude of touchpoints through which this can be achieved.
In time, with expressions getting more sophisticated and carrying more meaning, branding has become a tool for influencing not only recognition, but also trust and affinity with buyers, influencing all core prerequisites for more, more profitable and less risky transactions, the foundation of economic value creation. This makes it one of the most effective tools in business today.
Today, branding has evolved into a complex discipline, working with inputs from psychology, sociology, economics, anthropology, biology, statistics – which makes it hard to do well in isolation, requiring teamwork and exchange of ideas to get it right.
How have your views on brands and branding changed since you first got involved in the field?
With time, I navigated from a marketing perspective to an investor perspective on brands.
In the beginning, working in marketing, I thought of “brand” as the business selling products and services under a specific trademark. A “brand manager” manages that business. Reading more into the topic, I got a bit confused by views of various “experts” describing a brand as “what happens in people’s minds”.
Ultimately, upon some research and logical exercises with my colleagues at Interbrand, I now understand branding as everything you do with the intention to be recognized, with the brand the sum of all resulting expressions.
A brand is not something in the mind – that is called “image”. It is an intangible asset that belongs to the entity. The power of that asset to drive choice is driven by the associations in people’s minds, which influence their behavior towards the entity.
The most important learning is that, no matter the definition used, the key to success lies in a clear and relevant strategy, implemented consistently, authentically and responsively into all stakeholder experiences.
It is not enough to have a clear strategy if your people don’t believe in it and are not committed to “live” it in life and work. It is not enough for it to be relevant and meaningful if it is replicable in better conditions by competition.
It is not enough to be consistent if the environment changes. And today our environment – most importantly stakeholder expectations – change so fast, that it is almost impossible to keep catching up.
Successful entities manage to leapfrog expectations, create needs and desires beyond what people expect – leading to sustainable competitive advantages.
Technology break-through enable this on a product level. The art and science of making moves iconic complete the picture on an intangible, behavioral level.
Cities, regions, and destinations often heavily rely on heritage in their brand positioning. Why is this so, and what are the associated risks?
Heritage is the natural ingredient of a place brand narrative – as it is for many commercial brands. The first and most straightforward intangible asset a place holds is its history. Storytelling along with facts and symbols plays a large part in how humans learn, remember and engage.
A place usually has all three to some extent – a story, facts, and – if lucky – some powerful symbols. Time is just a variable in this case: a place doesn’t have to be “old” to have a heritage. Rome, to take an example, has stories, facts and symbols from ancient times, New York or Hong Kong’s assets are much younger but still powerful. The risk of looking exclusively into heritage is asset erosion and development stagnation.
If all a destination has on offer is monuments to see (natural or man-made), this can put stress on the infrastructure, even destroy parts of it, and reduce attractiveness through overcrowding. A few such overcrowded attractions are already trying to discourage visitors – from Machu Picchu allowing a limited number of visitors per year, to Amsterdam’s plans to reform how the red-light district is used.
Concentrating on one single asset of a place that is “milked” instead of developed can lead to over-specialization of the local workforce, reducing the potential for diverse, agile, future-oriented growth.
What will characterize clever place branding initiatives in the future?
With wealth continuing to increase for more people globally, allowing for means to travel, I do expect “classic”, heritage-oriented destinations to remain popular with people who have not seen them before.
Destinations providing top-notch attractions in various categories (“the best temple, the best medieval architecture, the best entertainment, the best sports activities”) must find ways to maintain the attractiveness of these landmarks in the face of overcrowding.
For the rest, the pressure to compete and differentiate will increase. In a way, modern means of crowd-sourced communication make it easier to get a message to the public – but the sheer amount of content makes it hard to stand out.
If an Asian or American tourist invests on a European trip, what destinations are they likely to prioritize? “The best”. Who decides what is “best”, and how does one get on a “best” list? We may see three trends:
- A concentration of first-time visitors in the most famous places (e.g. Venice, Paris, London, Machu Picchu, etc.)
- A flight of return visitors (or trend-setter would-be’s) from overcrowded “first-tier” attractions towards “insider tip” alternatives (Treviso, Bordeaux, Cornwall, Newcastle, Choquequirao)
- A search for new destinations for the “over-traveled” segment, who have already seen a lot of the world and are looking for authentic, truly off-the-beaten-track experiences.
With current information transparency and abundance, it is key for all categories to be “talked about”.
For the first two categories, existing assets provide the content – it is either the “classic must-see” or the “alternative tip”.
For the third category, particularly for destinations without famous landmarks, a successful approach may be less straight-forward. One can either build an iconic landmark – like the Guggenheim Museum in Bilbao, the MONA museum in Hobart, or, if this investment is not available, focus on the experience and what it means for the people.
Orientation towards the future is key. It can start with adding future-oriented “conclusions” to the heritage story, but new heritage can be built from scratch. The key is to ask future-oriented, human-centric questions, both about inhabitants and visitors. Giving them something to identify with on a personal level: “If our ancestors have built this amazing place, what does this say about us? About what we can do in the future? What does it say about you visiting us?”
Building affinity beyond esthetics, standing for values and character traits, providing self-expressive benefits should create the sustainable potential to evolve the destination, help it stay relevant. Think about “how do we want people to feel about themselves, rather than about us, when visiting our place”.
If we can trigger positive feelings beyond admiration for past achievements, if we can make people discover or feed something positive within themselves, then they will be more likely to come back. We go back to New York because it offers so much more than the monuments we see during our first visit.
To go down that path, smaller destinations could find character traits, values or personality attributes that could attract people beyond visiting a certain landmark. One would go to the Germany city of Ulm to enjoy the quirkiness and wit of its people, beyond seeing the tallest church in the world. One would go to Medellín in Colombia to witness its miraculous social transformation from a crime hot spot of the world into a thriving, progressive city of eternal spring.
What can place branders learn from commercial branding, and vice versa?
Commercial branding practitioners have in time distilled characteristics of strong brands to be used in managing them as assets. Thinking of brands as assets helps focus brand management on economic value creation. Demand drivers, the role of brand in the purchase, competitive strength, are all notions that place branders can use to improve their destination appeal for a variety of stakeholders – internal and external.
Vice-versa, commercial brand managers can learn about true authenticity – and its limits. They can observe the effects of common sense, or the lack thereof. Most importantly, they can understand the mechanics of an experience, its lifecycle, perception mechanisms and its influence on behavior and memory structures.
What do you remember about a trip, the day after? A week after? A year after? Destinations have fewer touchpoints and occasions to build memory structures in people’s minds than most companies that are part of daily life. And yet, the best ones are iconic enough to break through the sensory clutter and create sustainable, robust memory and affinity structures.
Since investment in branding is rarely on the top of classic KPI lists, how could local authorities nudge, rather than persuade, third parties to create content that speaks for the place? And how do you make sure it is “on strategy”?
Good content exists on adequate platforms and for a reason – local authorities can offer both platforms and reasons for people to express themselves.
“Build it and they will come” can transform into “offer it and they will build”. Experience principles can help keep things on strategy. They should translate the vision of what the place and its people want to stand for in the future into a language that content creators can understand and relate to.
Your key insights from your time with Interbrand?
Thinking of brands like an investor. Interbrand invented the brand valuation methodology – the most interesting to me about it is the thinking framework it gives to bridge something as intangible as the effect of branding on people’s minds to behavior and purchase – and thus to economic value.
Understanding the behavioral fundamentals helps focus every discussion about branding towards true value creation and reduces the “fluff” which particularly CFOs dislike when dealing with the topic.
Being based in Zurich – which cities and regions in Switzerland do you find particularly innovative in their approach to using place branding for attracting talent, visitors or investors? (And why?)
Switzerland is blessed with natural beauty, rich cultural heritage, and economic fame, all supported by a great infrastructure. Great premises for traditional place branding – and for strong inter-regional competition. More than anything though, the image of the country as a whole is particularly strong, overshadowing all of its regions.
If “Bavaria” enjoys some distinct fame alongside “brand Germany”, there is hardly a regional (canton) brand of that prominence in Switzerland. Cities enjoy strong “traditional” images, based on first-tier local characteristics – Zürich as a financial center, Geneva as the hub for world organizations, Lucerne for its stunning nature-culture combination, St. Moritz for glamorous vacations, etc.
There are few places stepping out of the heritage line, using less straight-forward assets like skiing, culture, leisure or architecture. One that I know well from work that stands out is the canton of Grisons (Graubünden), who is trying to build a modern destination appeal on top of its nature and cultural heritage. Its visual identity is modern, the message architecture focuses more on the present and future rather than the tempting past, appealing to young, working people as a potential life span destination, beyond classic tourism.
Another one is Winterthur, a city which, bereft of deep cultural heritage or natural beauty, tries to establish itself as a small, nimble, no-nonsense, but progressive, innovative counterpoint to Zürich, investing in education, cultural and entertainment experiences alongside scientific innovation.
Which trends are likely to influence the success of place branding initiatives in the years ahead?
The first buzz word coming to mind is one that I actually think will not influence place branding much – the obsession of purpose.
Companies big and small scramble to try to (often artificially) define a “purpose of existence beyond making money” in order to attract value-driven stakeholders – predominantly young ones.
A destination is expected to have that by definition – its primary purpose has traditionally not been to make money. If anything, here we see a reversed trend, places trying to find more and more ways to make money, moving away from their “primary purpose” of offering inhabitants and visitors the best experience possible.
The trend I believe will improve the quality of place branding most is customer-centricity and co-creation of experiences. With a twist: while most companies focus on their (external) customers, employees being addressed through separate, smaller initiatives, I believe destinations should put their inhabitants first, create a great life for them – and visitors will come. A happy place will attract happy people or people who want to feel happy.
With the rise of Airbnb and Uber, locals have been automatically involved in creating authentic experiences for visitors who “buy tourism but don’t want tourism”. Destinations who can find further experience-creating partners, be it commercial or residents, can see a diversification of offered benefits that would be difficult to obtain through a centralized, controlled effort within the limited budgets available.
Looking beyond hotspots like Zurich – how can a small city, such as Chur in Eastern Switzerland, attract talent? What does it take?
It takes courage. What brought us here does not necessarily take us forward. It takes courage to move out of the comfort zone, the courage to give up control, the courage to co-create something with an initially unclear outcome. Future-oriented experiences and opportunities, coupled with an increased quality of life for inhabitants are needed to make a difference for such places.
Chur will never “win” the competition for visitors (and desired inhabitants) by leaning on the heritage (although it is the oldest city in Switzerland!) or its few architectural landmarks. It must create a present and future that are aspirational for the young generation. It can involve radical decisions, and opportunities abound: just look at what Millennials, Gen Z-ers buy into and implement it courageously, radically, emphatically.
Involve children and teenagers to imagine what world they would like to live in – then start building it. Co-create innovative, sustainable living solutions for inhabitants and unique experiences for potential visitors. You don’t need to be old to have a heritage – look at the current tech brands. They have a heritage even if they are decades younger than the heritage-full economic powerhouses they displaced from market leadership.
Anything else you’d like to mention?
With some prominent place branding efforts restricted to “surface” elements like logo, visual identity, a slogan, and an advertising campaign, one may think place branding lags behind commercial branding in terms of methods used and sophistication of its strategies.
Yet more and more destinations go deeper in understanding the elements and mechanisms of a good branding strategy, and professionalize its management beyond communication, into strategic regional development.
Like in commercial branding, place branding professionals would do good to create an understanding of what branding is and what it does, from first principles. Work with fundamental human behavior traits and gauge which ones can be influenced by branding. Link it to the development strategy just like commercial brands should link their branding and business strategies into a whole, powerful force that changes the world of their stakeholders for the better.
Thank you, Calin.
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