Brands do not exist. One could make this argument, claiming that you can’t harvest a brand in the ground, build it from raw materials in a factory, or mass produce it and store in a warehouse. You can’t forget to pack it before leaving on holiday or accidentally leave it lying around for the dog to chew.
Yes, one may not be able to touch a brand, but they are arguably the most valuable intangible asset on your company’s balance sheet. Strong brands enable consumers to distinguish your products from that of your competitors. Brands cultivate affinity, trust and customer loyalty. Brands allow your company to charge a premium for its products. And brands play a key role in making products stand out in an increasingly competitive global marketplace.
Strong brands are not created overnight. They are the result of the brand owner’s consistent commitment to quality, a willingness to listen to, and serve, its customers, and they are built on a foundation of trust. A recent report by Edelman revealed a deep crisis in trust generally, particularly in government and the media. Six in 10 survey respondents said they trust the results of search engines over web-content developed by humans. Among those who are uncertain who—or what—to believe, business is the most trusted institution. Indeed, the report described business as “the last retaining wall.” Brands lie at the heart of this trust.
From the outset, a brand needs to be maintained and protected. By registering, managing, and carefully licensing your trademarks, you protect your brands from being used or abused by competitors or counterfeiters. This is a vital part of any brand strategy.
Protecting brands with trademarks is also good for the bottom line. A study of European brands found that industries with high trademark use have on average 29% higher revenue per employee than those that do not. They also pay their employees 19% higher wages. A similar study look at the United States found that workers at companies in trademark-intensive industries earned $1,236 per week, compared to the $896 earned by workers in other industries.
The boost that trademarks can provide a company and economy is not just restricted to developed economies. Trademarks in Latin America, a study of the economic impact of trademarks in Chile, Colombia, Mexico, Panama, and Peru, found that the economic activities where trademarks are registered and used intensively contribute 15% of GDP on average and generate 18.5 million jobs. Depending on the country, these 18.5 million workers earn between 4.6% and 25% more than workers involved in other economic activities. In short, a strong trademark system is good for business and its employees.
Despite this evidence, many businesses fail to register their trademarks. To some, brands are just a line on a balance sheet and trademarks an additional legal cost. It is in a company’s best interest to change this. And this change needs to come from the top! CEOs and those around boardroom table should take a more hands-on approach to their company’s brands, actively take steps to understand their brands’ value, and act on this information.
Most companies have a high-level brand strategy, often led by its marketing department, but few of these place trademarks where they should be: at the centre. Without trademarks, a brand is at risk. Putting trademarks at the centre of the brand strategy will help protect market share and drive future growth.
