Like a Virgin

BRAND AWARENESS

The conventional wisdom at business schools is that you stick with what you know. Of the top twenty brands in the world, nineteen ply a well-defined trade. Coca-Cola specialises in soft drinks, Microsoft in computers, Nike in sports shoes and gear.

A glaring exception in this list is Virgin – and the fact that we’re worth several billion dollars really bothers people who believe that they know ‘the rules of business’ (whatever they are). We’re the only one of the top twenty that has diversified into a wide range of business activities, including airlines, trains, holidays, mobile phones, media, the Internet, financial services and health care.

I am proud to be able to say that we have created more billion-dollar companies in more sectors than anyone else.

Between 2000 and 2003, Virgin created three new billiondollar companies, all from scratch and in three different countries. Virgin Blue (now Virgin Australia) took 35 per cent of the aviation market and reduced fares dramatically. Virgin Mobile became Britain’s fastest growing network. Virgin Mobile in the United States was one of the country’s fastest growing companies ever, private or public.

As a result of this diversification, Virgin has been able to weather the storm of the global recession that began in 2008. Our risks are spread over many companies, industries and countries; and the failure of one will not bring down the whole group.

Why, then, are business teachers telling young entrepreneurs to stick to what they know, rather than advising them to imitate a company like Virgin?

Because they should. The Virgin brand came into existence gradually, with each forward step reflecting what I was fundamentally interested in. And, to my own surprise, it wasn’t publishing magazines, as I’d originally thought; it wasn’t even music. My driving force, I realise now, was finding new ways to help people have a good time – ideally, in places where they were least expecting it. Such as airports.

Contrary to appearances, Virgin is highly focused: our customers and investors relate to us more as an idea or philosophy than as a company. It’s all about the Virgin experience and the ongoing challenge is to make sure that this experience is consistent with its expectation levels across all sectors. It’s all about the brand.

If you are embarking on a new venture, how should you envisage and develop your brand? Let’s start with a quick sketch of what a brand does.

Brands exist as a means of communicating what to expect from a product or service. Subscribers to a magazine or newspaper expect a certain perspective and subject matter; families look forward to taking their kids to see the new Pixar movie, regardless of whether it’s about animals, toys or cars.

The Virgin brand tells you that using this credit card is rather like using this airline, which, in turn, is rather like using this health club, staying in our hotels and paying into this pension fund. It is a guarantee that you’ll be treated well, that you’ll get a high-quality product that won’t put any surprise dents in your bank balance, and you’ll probably get more fun out of your purchase than you expected.

Should you follow the Virgin formula and focus your new company on providing a certain customer experience? It really depends on the type of business you are in. We are in consumer-facing sectors where service is key. You need to assess what is core to yours.

When you are creating your first ads, designing a logo and reaching out to potential customers for the first time, you may be tempted to create a brand that’s very corporate and remote. Too many companies want their brands to reflect some idealised, perfected image of themselves. As a consequence, their brands acquire no texture, no real personality and no public trust.

In contrast, Virgin wears its often self-deprecating sense of humour on its sleeve. It has to do with our wanting to be honest about the ups and downs of our business and to share what we think with the people who matter most to us – our customers. The people who see our ads are the same people who read about our tussles, our setbacks and our mistakes. So why would we want to pretend the real world doesn’t affect us?

Whatever you and your team decide that your new brand will stand for, you will have to deliver on that promise. So when you’re having these discussions, be honest about what it is you’re offering.

It is far better to underpromise and overdeliver than vice versa. Superlatives-laden ads for mediocre services and products are the norm with way too many operations. Promise only what you can deliver, and then deliver everything you promise plus some. That’s the only way you’ll ever control your brand.

And beware: brands always mean something. If you don’t define what the brand means, your competitors will. Apple’s ads contrasting a fit, happy, creative Mac with a fat, glum, nerdy PC tell you all you need to know about how that works.

So, what’s next? For any business building a consumer brand, speaking to journalists is part of the deal. Be prepared! Know what you stand for and be certain that you’re delivering it. Then you’ll be able to answer every question openly and frankly, building your relationships with your customers and the media.