Branding For Successful IPOs

When many companies are jostling for attention in a crowded IPO world, where many are equally worthy – how does a name stand out? And how does it begin to ‘own’ all the positives it has  - so that there is an instant ‘buy-in’ without going into detailed financial analysis and promoter history every single time.  The answer lies in branding.

A brand is the sum total of what it’s audiences think of the company/ brand. There are multiple audiences for any company.

The Primary Audiences are internal and external and are in direct contact with the brand– their employees and their customers.  Their actions directly impact the company on a day-to-day basis. Customers increase the top line, their loyalty and willingness to pay a premium increases the bottom-line .  On the other hand, employees deliver the efficient and profitable functioning of a company. They  ensure company targets are met and they ensure competitive advantage through their loyalty and  dedication.

The Secondary Audiences influencers – and impact the company’s fortunes indirectly. They are Policy Makers, Media, Investors (both shareholders and Financial Institutions) and Industry bodies. (Such as Trade Associations, FICCI, CII).

The Tertiary Audiences are the customer’s customers in case of B2B brands and public-at-large. They do not impact a brand’s fortunes directly but do build a general public opinion about the company. (I have heard a senior govt. official talk about general goodwill and have said that public opinion will not let the TATA brand die if ever it is in dire straits; but a lesser-known brand might never get similar support).

There is one situation however, when the Secondary Audience of the Investor Community becomes as important as their customers and employees. The time when investors can directly influence the fortunes of a company is during an IPO.  A successful IPO is when the offered shares are fully subscribed or over-subscribed. Companies are over-subscribed when people believe in a strong growth story for the company. They believe in the future of the company and want to become a part of the growth story..



The truth is, in today’s world – there is no guarantee of a growth story. Even Reliance does not evoke the blind faith (that it will reward its investors) any more. And for a company going in for an IPO – they are by definition lesser known. They tell their story through road shows to brokers and investment bankers, through advertising and press stories.  The company’s that have a successful IPO are the ones that STAND OUT among the hundreds of others who are doing the same roadshows, advertising and PR.  These are the brands – that have compelling stories.

Not every investor is going to look for detailed information about the promoter’s track record, the industry outlook, the management expertise, the pipeline of orders or the unique differentiation offered by the brand. They will trust the opinion of experts. And how do experts pick brands? There are many that appear good. So how will they choose the ones that go into their portfolio? Much after the analysts reports, they will eventually choose the brand the BELIEVE will deliver.  Thus brands need to strengthen this belief.

Branding is a symbol for all that is true for a company. Just as we create tabs for filing information, a good corporate branding exercise creates such a tab when we file away information in our mind. The Dabur tree, or the Nike swoosh is more than good design. It is the repository of all information, feelings and perceptions we have about the company. The company logo triggers all associations – and a corporate branding exercise can ensure that the RIGHT associations are triggered with a logo / name that is MEMORABLE. A good brand is one that stands out in among hundreds of others fighting for the same share of mind.

A good branding exercise identifies ALL the positive associations that the brand needs to evoke and ensures that its brand design triggers the same associations. Across ALL the three audiences.

Indian Mortgage Guarantee Corporation is a consortium between Genworth , ADB, IFC and NHB.  The brand spoke to its primary customers – Banks and Home Loan NBFC’s by underwriting their risk. They promised certainty in an uncertain world and category and brand radiated optimism, certainty (as certain as the sun rising tomorrow) and growth for all.  When a brand builds a positive image – it would be very easy for those feelings to get attached to this symbol. This brand identity works because not only is it a perfect association with the brand in terms of what it communicates, it is also unique and memorable.

Branding is more than a logo. It is the definition of a brand from all viewpoints and defines a brands promise, values, culture, personality, tone of voice and visual language.  If a company is planning to go in for an IPO – it should start working on its brand 2-3 years before to get the maximum mileage from the branding exercise.

At DY Works – we have worked with brands and have significantly increased their brand valuation. We have impacted share prices and trade volumes. We have built strong brands.

By
Alpana Parida 
President
DY Works