They say the best defense is a good offense.
But in today’s business world, we are not sure that is entirely accurate.
Instead, we would say:
The best defense is a good brand.
That is why, today, we are going to be talking about goodwill.
Specifically, we will discuss:
Let’s get started:
Goodwill refers to the monetary value of a company’s brand: it is a way we can attempt to put a tangible value on an intangible asset.
Goodwill is calculated by taking into account several elements. These include (but are not limited to) a company’s:
We typically discuss Goodwill in the context of purchasing another company.
For example:
When Amazon purchased Twitch for $970 million, they would have calculated the value of Twitch’s wider brand. Amazon has since taken measures to protect this goodwill.
In 2018 they took a Canadian spammer to court for creating a spambot, claiming he had: “caused injury to Twitch’s brand, goodwill, reputation and customer relationships.”
However, goodwill extends beyond the buying and selling of companies. Calculating goodwill has positive benefits for organizations that do not wish to be bought and sold. Why?
Because goodwill (or a brand’s awareness and influence) has a direct impact on:
We will explore this later in the article. But, for now, let’s take a look at goodwill in action and view this concept in a bit more context.
Coca-Cola is one of the world’s most valuable companies.
Their products are sold in all but two countries in the world (source: Business Insider). You would be hard-pressed to find someone who has never tried one of their products!
But, what has helped them to become such a business behemoth?
Well, there are several contributing factors. We need to consider their:
There is no doubt they have the power and quality to provide for customers on a worldwide scale. They can force their way onto store shelves almost anywhere they want.
However:
Many other less successful companies can boast the same. So, what was Coca-Cola’s difference-maker?
Well, we would argue it was their brand.
They have created an instantly recognizable brand. Whether you like their product or not, you could quite easily sit there right now and:
The brand has even influenced modern culture, like cementing the red-and-white appearance of Santa Claus. People in the UK even use their trucks to mark the start of the festive period.
This has created an army of people who want to drink their products.
Better still, their brand consistency has made them a safe bet in the beverage world. If you need to choose between Coca-Cola or a lesser-known brand, you likely choose Coke.
Let’s take a quick look at that in action:
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Pepsi is Coca-Cola’s biggest competitor.
They have been running a taste-test marketing campaign since 1975.
It is a blind test where subjects are asked to take a sip from two unmarked glasses; one contains Pepsi, the other Coke.
Often, participants prefer the taste of Pepsi to Coke:
There are some biases to this test. But stay with us.
Coca-Cola has 43% of the US market share. It stands to reason that some of those people would actually prefer the taste of Pepsi. Scientists have found as much.
But the more interesting finding is the impact product labels (and their associated brands) have on people.
Researchers found that when Pepsi was placed in a Coke bottle (and vice versa), participants chose the brand they preferred. Even when the contents were not correct.
As such:
Coca-Cola’s brand has a tangible impact on their customers. It creates a positive association and a quasi-tribe around them.
On a larger scale, this directly influences their:
Goodwill, then, represents the effectiveness of a company’s brand on impacting these metrics.
Now, with a little more context, let’s revisit what Goodwill is and why it is important for your brand in 2020.
One of our 2020 marketing predictions is that branding will become non-negotiable.
This is because:
Your brand, then, is the biggest and most important differentiating factor.
It acts as a moat around your business, protecting all of the assets inside.
When customers are faced with a choice between your product and your competitors, it will be the best and most resonant brand that wins out.
This will, in turn, have a direct impact on your:
In the next section, we will look at how you can begin to harness goodwill for your company.
There are six ways to begin building your brand — and the all-important goodwill — that have been proven, time and time again, to be effective.
They are:
Let’s dive into each of them.
The first step is to bring the people who work for your organization together. Depending on your size, this could be:
However you do this, you will want to have people from all relevant teams represented, like:
Your aim is to draw on the ideas and experiences of these people to understand what kind of brand you currently are and create a vision of who you want to be.
These people will have a wide range of different perspectives that will give you a deeper understanding of your potential brand. They help you view your business from all angles.
Get these ideas down on paper and look for the key elements that really matter.
Once you have collected them, it is time to start storytelling.
Brand storytelling is powerful.
It creates a deep human connection and emotional response.
According to industry research, customers see this as more important than their overall satisfaction. Why?
Because it makes the brand relevant to their lives. They can project themselves onto the story and associate with it.
To tell a brand story, you need four elements:
Crafting a brand story is a little beyond the scope of this article. But, do not worry. You can learn exactly how to do it here in our brand storytelling guide.
Brand consistency creates trust.
By continually showing up and sharing the same relevant message, brands can become the go-to choice in their industry.
As you have already seen, this is why Coca-Cola continually takes more of the market share than Pepsi. But it is also why people:
One of the best ways to deliver this consistent message if through content marketing. You can do it by using:
Basically, any medium that is relevant, accessible, and helpful to your audience.
You can learn more about brand consistency in our ultimate guide.
Brands with high levels of goodwill tend to be responsive.
You know, the ones that:
In today’s marketplace, people want to connect with brands who care.
Some of the most common reasons for brand switching are that customers feel disconnected, or under-valued, by their chosen brands. So, avoid this trap.
Be sure to:
Having connection and responsiveness as pillars of your brand will go a long way to developing high levels of goodwill.
Brand intelligence is paramount for brand building.
In short:
It is the process of listening to your customers’ online conversations to understand their sentiment towards you.
You do this by:
You can learn more about how brand intelligence works, and how to implement it, in our definitive guide.
The final stage here is to review.
Brands that want to build Goodwill must:
This applies to both the micro and the macro of brand building. You need a review process for your entire brand-building strategy, and for all the elements that make it up.
While this may not be “fancy” work, it is in the review and adaptation process that truly incredible brands are built.
This is one of the many reasons we are so taken by the process of agile marketing. You can learn more in our guide to agile marketing here.
Goodwill is the monetary value of a brand. It is typically calculated for the buying and selling of companies. But, understanding goodwill can be powerful for all organizations.
Coca-Cola’s brand, and the goodwill that comes with it, has a direct impact on their:
There are six ways you can build a brand and harness the power of goodwill: